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SMITH'S 


Financial    Dictionary 


BY 
HOWARD    IRVING    SMITH 


NEW   YORK 
1903 


Copyright.  1902,   by 
Howard   Irving   Smith. 


All  Rights  Reserved. 


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INTRODUCTORY. 


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~      The  terms  embraced  in  the  vocabulary  of  finance  practically 
constitute  in  themselves  a  language.  Furthermore,  these  terms 
have  become    legal  by    usage ;  they    have,  indeed,  in    many 
~    instances,  been  incorporated  into  the  statutes.     The  nomencla- 
*■    ture  of  finance  may  be  said  to  be  a  part  of  the  system  of  finance, 
S  for  without  recourse  to  that  nomenclature  no  financial  proposi- 
tion can  be  advanced  or  financial  engagement  entered  into  or 
consummated. 

Smith's  Financial  Dictionary  was  compiled  for  the  purpose 
of  assembling  and  interpreting  the  terms  employed  in  financial 
and  allied  commercial  affairs.  In  addition  to  furnishing  a  cata- 
logue of  terms,  with  their  meaning,  the  work  treats,  under 
proper  titles,  the  whole  range  of  banking,  money,  credit,  stocks 
and  bonds,  commercial  paper  and  other  negotiable  instruments, 
domestic  and  foreign  exchange,  and  speculation  in  securities 
and  commodities.  The  Dictionary  is  international  in  its  scope. 
It  contains  the  financial  and  related  terms  in  use  in  Great 
Britain  as  well  as  those  in  use  in  the  United  States  ;  so  that 
it  encompasses  the  list  of  such  terms  in  the  English  language. 
To  increase  the  utility  of  the  Dictionary  a  summary  of  the 
monetary  systems  of  the  world  is  included,  together  with  a 
table  of  the  monetary  designations  of  the  various  countries, 
with  their  equivalents  in  the  moneys  of  both  the  United  States 


389149 


And  Great  Britain.  Compound  interest  tables  and  tables  show- 
ing returns  from  investments  at  different  prices  and  at  different 
rates  of  interest  or  dividend  also  are  provided.  In  short,  the 
aim  has  been  to  omit  nothing  which  might  facilitate  financial 
transactions  by  conveying  a  comprehension  of  financial  facts, 
practises  and  expressions.  The  arrangement  of  the  Diction- 
ary is  free  from  complication.  Desired  information  may  readi- 
ly be  obtained  by  turning  to  the  appropriate  term,  title  or 
name. 

By  means  of  the  Dictionary  one  unfamiliar  with  finance  may 
promptly  and  adequately  inform  himself  upon  any  financial 
subject.  Exact  understanding  of  the  terminology  of  finance 
is  essential  to  the  successful  conduct  of  financial  affairs.  In 
actual  dealings  lack  of  that  exact  understanding  may  be  and 
often  has  been  the  cause  of  loss.  The  most  thoroughly  in- 
formed can  hardly  hope  to  keep  in  mind  the  multiplicity  of 
terms  that  exist  and  be  able  likewise  to  define  them.  There 
has  been  need,  therefore,  of  a  permanent  record  of  these  terms, 
with  sufficient  elucidation  of  them ;  and  this  need  Smith's 
Financial  Dictionary  is  intended  to  supply. 

The  Dictionary  is  specially  adapted  for  bankers,  brokers, 
manufacturers,  merchants  and  lawyers.  The  determination  of 
a  suit  at  law  frequently  depends  upon  a  clear  definition  of  a 
term  peculiar  to  a  business  or  profession.  The  phraseology  of 
finance  is  here  presented  that  it  may  be  used  with  precision. 


SMITH'S 

Financial  Dictionary 


A 


Ai.  A  designation  signifying  first  class  or  without  a  supe- 
rior, 

A.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  assented  or  class  A;  see  Assented  stocks  or  bonds; 
also  see  Classified  bonds  and  Classified  stock. 

Abatement.  In  a  contract  abatement  is  a  reduction  in  the 
claim  by  the  creditor. 

"A"  bond.  A  bond  in  an  issue  divided  into  a  series  num- 
bered alphabetically. 

Above  par.  When  the  market  price  is  greater  than  the  par 
or  face  value.     For  additional  information  see  Par. 

Abrasion.  The  loss  sustained  by  coins  or  by  gold  or  silver 
bars  by  rubbing  against  each  other  or  against  other  objects 
or  substances.  The  value  of  gold  or  silver  for  export  or 
import  is  reckoned  by  weight  and  fineness  whether  in  coins 
or  bars. 

The  law  says  that  any  gold  coins  of  the  United  States 
reduced  in  weight  by  natural  abrasion  not  more  than  1-2 
of  I  per  cent  after  a  circulation  of  twenty  years,  as  shown  by 


SMITH'S  FINANCIAL  DICTIONARY. 


the  date  of  coinage,  and  at  a  ratable  proportion  for  any  period 
less  than  twenty  years,  shall  be  received  at  their  nominal  value 
by  the  United  States  Treasury. 

Silver  coins  are  worth  their  face  value  so  long  as  the  inscrip- 
tions on  both  sides  can  be  deciphered. 

Mutilated  coins,  either  gold,  silver,  nickel  or  bronze,  are 
worth  only  their  bullion  value,  or  in  other  words,  are  worth 
only  the  commercial  value  of  the  metal  of  which  they  are 
composed. 

The  extent  to  which  coins  may  be  reduced  in  weight  by 
abrasion  or  wear  and  still  be  redeemable  at  the  Treasury  is 
designated  tolerance  or  mint  remedy. 

The  term  tolerance  or  mint  remedy  also  applies  to  the 
allowance  for  a  slight  difference  in  the  fineness  of  gold  or 
silver  from  the  government  standard.  In  the  United  States 
the  limit  of  difference  in  gold  either  above  or  below  is  one- 
thousandth  ;  in  silver  it  is  three-thousandths. 

Absolute  indorsement.  An  absolute  indorsement  binds  the 
indorser  to  pay  on  no  other  condition  than  the  failure  of  the 
prior  parties  to  do  so  and  on  due  notice  to  him  of  their  failure. 

Absorbed.  When  an  issue  of  stock  or  bonds  has  passed 
into  the  hands  of  the  public  it  has  been  absorbed ;  and  when  the 
general  reselling  of  it  has  ceased  it  has  become  assimilated 
or  digested.  Also,  when  a  block  of  stock  held  speculatively 
has  been  sold  it  has  been  absorbed  by  the  market;  and  when  a 
settled  price  for  it  has  been  established  it  has  been  assimilated 
or  digested. 

Acceptance.  A  bill  of  exchange  (draft)  payable  at  a  future 
date  which  the  drawee  (the  one  upon  whom  it  is  drawn) 
accepts  prior  to  maturity  by  formally  acknowledging  that  it  is 
an  obligation  for  which  he  is  liable.  He  writes  (or  stamps) 
across  the  face  of  the  paper  the  word  "Accepted"  and  beneath 
this  word  he  inscribes  the  date  and  then  signs  his  name.  If 
he  desires  to  make  it  payable  at  a  particular  bank  or  place  he 
will  write  between  the  word  "Accepted"  and  his  name  the 
stipulation  that  it  shall  be  payable  at  such  a  bank  or  at  such  a 
place.  Acceptance  of  the  paper  imparts  to  the  paper  itself  the 
name  acceptance. 

When  acceptance  of  a  bill  is  refused  proceedings  may  be 
begun  against  the  maker  and  indorser  without  waiting  for  the 


SMITH'S  FINANCIAL  DICTIONARY. 


bill  to  mature — without  waiting  for  the  date  of  payment   to 
arrive. 

An  acceptance  is  "general"  (or  "clean")  when  it  assents 
without  qualification  to  the  order  (draft)  as  made  by  the 
drawer;  it  is  "qualified"  when  the  acceptance  is  for  a  less  sum 
than  is  named  in  the  bill  or  when  some  modifying  condition  is 
imposed  or  attached ;  and  it  is  "supra  protest"  or  "for  honor" 
when  accepted  by  a  person  other  than  the  drawee  (the  one 
drawn  upon)  to  save  the  honor  or  credit  of  the  drawer  or  an 
indorser  after  refusal  of  the  drawee  to  accept.  An  acceptance 
is  "special"  when  the  form  of  acceptance  is  special  or  par- 
ticular or  is  unusual. 

The  acceptance  of  a  draft  makes  the  acceptor  the  principal 
debtor.  After  acceptance  the  drawer  stands  practically  in  the 
position  of  an  indorser  of  a  promissory  note,  being  only  second- 
arily liable.  Acceptance  admits  everything  necessary  to 
make  the  acceptor  liable.  It  admits  the  obligation  to  the 
maker  of  the  draft  and  the  acceptor  will  not  afterwards  be 
allowed  to  deny  this  to  the  damage  of  a  holder  of  the  paper. 

The  drawee  (the  one  who  is  to  pay)  is  allowed  24  hours 
after  the  presentation  of  the  bill  in  which  to  decide  whether  he 
will  accejit  it.  This  allowance  of  time  is  for  the  purpose  of 
permitting  an  examination  of  documents  accompan3ang  a  bill, 
but  it  likewise  is  granted  in  the  case  of  a  clean  bill — a  bill 
which  is  not  accompanied  b}-  documents. 

For  additional  information  see  Commercial  paper ;  also  see 
Negotiable  instrument. 

Acceptance  bill.  The  abbreviated  name  for  a  bill  for  accept- 
ance ;  see  Bill  for  acceptance. 

Acceptance  for  honor.  Said  when  a  party  other  than  the 
drawee  (the  one  drawn  ui>on)  accepts  a  bill  (draft)  which 
has  not  been  honored  by  the  drawee.  The  purpose  is  to  save 
the  honor  (credit)  of  the  drawer,  who  is  looked  to  to  ]ir(^tect 
or  reimburse  the  acceptor. 

Acceptance  supra  protest.  Acceptance  after  protest ;  accept- 
ance by  a  part}^  other  than  the  drawee  (the  one  drawn  upon) 
of  a  bill  (draft)  which  has  not  been  honored  by  the  drawee 
and  has  been  protested.  The  purpose  is  to  save  the  honor 
(credit)  of  the  drawer,  v.  ho  is  looked  to  to  protect  the  acceptor.' 

Acceptor.     The  one  who  accepts  and  by  so  doing  jiromises 


SMITH'S  FINANCIAL  DICTIONARY. 


to  pay  a  bill  of  exchange  (draft).     For  additional  information 
see  Acceptance. 

Accommodation  bill.  A  bill  of  exchange  (draft)  drawn  or 
accepted  as  an  accommodation  to  another.  Another  name  for 
such  a  bill  is  non-value  bill.     Also  see  Value  bill. 

In  Scotland  an  accommodation  bill  is  called  a  wind  bill. 

Accommodation  indorsement.  Indorsement  when  the  in- 
dorser  derives  no  use  or  benefit  from  the  paper.  The  indorse- 
ment, however,  involves  full  liability  unless  there  is  a  special 
agreement  to  the  contrary.     See  Accommodation  party. 

Accommodation  indorser.  One  who  without  consideration 
or  protection  indorses  the  paper  (promissory  note  or  bill  of 
exchange  or  draft)  of  another  which  is  not  payable  to  himself. 

Also  see  Accommodation  party. 

Accommodation  note.  A  promissory  note  given,  not  for 
value  received,  but  as  an  accommodation  to  another.  There 
are  also  accommodation  bills  of  exchange  (drafts). 

The  maker  of  an  accommodation  note  is  fully  liable  for  the 
amount  of  it,  except  in  special  circumstances,  for  which  see 
Accommodation  party. 

Accommodation  paper.  Negotiable  paper,  as  bills  of  ex- 
change (drafts)  drawn,  accepted  or  indorsed,  or  promissory 
notes  made  or  indorsed  without  consideration  by  one  person 
to  enable  another  to  obtain  credit  or  to  raise  money. 
■  As  between  the  maker  and  the  accommodation  indorser 
nothing  can  be  recovered. 

Accommodation  party.  One  wdio  signs  a  negotiable  instru- 
ment as  maker,  drawer,  acceptor  or  indorser  without  receiv- 
ing value  therefor  and  for  the  puri)ose  of  lending  his  name  to 
some  other  person. 

Such  a  person  is  liable  on  the  instrument  to  a  holder  for 
value  (for  a  consideration  paid  in  money  or  otherwise),  not- 
withstanding that  such  holder  knew  him  to  be  only  an  accom- 
modation party. 

An  accommodation  indorser  may  place  his  name  on  the 
paper  with  an  understanding  that  it  is  a  mere  formalil\-  and 
that  he  is  not  to  be  called  upon  for  payment  in  any  event;  in 
another  case  there  may  be  an  understanding  tliat  the  paper  is 
to  1)c  usfd  for  some  i)articular  ])ui"i)ose  and  for  no  olhrv.  In 
the  first  case  the  accommodation  indorser  is  not  liable  to  the 


SMrUJ'S  I'INANCJAL  DICTIONARY 


iirst  holder  in  any  event;  in  the  second  case  he  is  not  liable  to 
ihe  first  holder  if  the  paper  is  with  the  knowledge  of  that 
holder  diverted  from  the  purpose  for  whicii  it  was  issued. 
But  in  either  case  he  is  liable  to  any  subsequent  holder  who 
lias  taken  the  paper  in  good  faith  and  with  no  knowledge  of  the 
restriction  or  limitation.  The  instrument  cannot  be  enforced 
by  any  person  who  takes  it  in  violation  of  such  terms  and  con- 
ditions when  notice  thereof  has  been  given. 

Account.  A  record  or  statement  of  debits  and  credits  or  of 
receipts  and  expenditures  or  of  any  business  transactions. 

To  account  is  to  render  a  report  or  statement;  to  make  an 
accounting. 

Account,  The.  On  the  London  Stock  Exchange  the  account 
means  either  the  fortnightly  settlement  or  the  period  from  one 
fortnightly  settlement  to  another.  When  stocks  are  bought 
(or  sold)  for  the  account  (as  distinguished  from  for  money) 
they  are  to  be  paid  for  at  the  forthcoming  settlement.  There 
is  one  settlement  about  the  middle  of  the  month  and  there  is 
another  at  the  close  of  the  month. 

On  the  London  Stock  Exchange  most  of  the  dealings  are  for 
the  account,  which  means  that  the  transactions  are  to  be  con- 
cluded or  existing  differences  on  them  settled  in  the  next  fort- 
nightly settlement.  Four  consecutive  days,  called  account 
days,  are  set  apart  twice  a  month  for  the  settlement  of  con- 
tracts in  stocks  other  than  government- stocks  or  bonds.  In 
these  latter  there  is  a  settlement  only  once  a  month. 

Buying  and  selling  of  stocks  for  the  account  on  the  London 
•exchange  is  the  same  as  buying  and  selling  regular  way  (in 
the  regular  way)  on  the  New  York  Stock  Exchange,  except 
that  on  the  New  York  exchange  there  is  a  settlement  every 
day  for  transactions  of  the  previous  day.  Business  for  money 
(cash)  on  the  London  exchange  is  small,  as  in  fact  it  is  on 
the  New  York  exchange. 

Tlie  word  account  is  also  used  to  express  the  extent  of  specu- 
lative positions  open.  For  instance,  an  operator  is  said  to 
have  a  large  account  A\hen  he  is  heavily  involved  either  on  the 
bull  or  bear  (long  or  short)  tack  (or  side).  It  is  said  that 
there  is  a  l)ig  bull  or  bear  account  in  any  market  when  opera- 
tors on  the  long  or  short  side  have  opened  large  positions. 

I~or  additi(^nal  inf(M-niation  see  Settlement,  The. 


10  SMITH'S  FINANCIAL  DICTIONARY. 

An  effort  to  introduce  dealings  for  the  account  on  the  New 
York  Stock  Exchange  was  not  successful  and  was  abandoned. 
Dealings  as  previously  in  the  regular  way  were  permitted  at 
the  same  time  and  by  this  test  the  preference  of  a  majority  of 
the  members  of  the  exchange  for  dealings  in  the  regular  way 
was  shown. 

Accountable  receipt.  A  receipt  given  for  money  or  property 
to  be  subsequently  accounted  for. 

An  accountable  receipt  is  given  by  a  party  who  receives 
money  which  he  is  to  disburse  and  for  which  he  is  to  account. 

An  accountable  receipt  is  given  by  a  party  who  receives 
(as  a  consignee  or  commission  merchant)  goods  which  he  is 
to  dispose  of  and  for  which  he  is  to  account. 

Account  and  risk.  The  blank  forms  provided  by  brokers  to 
be  filled  in  by  speculators  in  stocks,  grain,  cotton,  etc.,  usually 
bear  the  inscription  "Buy  (or  sell)  for  my  account  and  risk," 
which  means  that  when  an  order  is  given  to  the  broker  it  is  to 
be  executed  for  the  account  and  risk  of  the  customer  (the 
speculator)  and  that  the  broker  is  merely  acting  as  an  agent  in 
the  matter. 

Accountant.  One  who  is  skilled  in  accounts;  an  expert 
bookkeeper. 

A  chartered  accountant  (English)  is  a  person  who  holds  a 
charter  (certificate)  from  the  Institute  of  Chartered  Account- 
ants stating  that  he  has  passed  an  examination  and  is  compe- 
tent to  perform  an  accountant's  w^ork. 

Account  current  or  current  account.  Same  as  open  or  run- 
ning or  continuing  account;  an  account  that  co^itinues  and  in 
which  a  settlement  is  made  at  intervals,  as  every  30  days,  60 
days  or  twelve  months. 

In  Great  Britain  a  current  account  (also  called  drawing  ac- 
count) in  a  bank  is  one  which  may  be  added  to  by  deposits  and 
drawn  against  at  will — at  any  time.  On  the  other  hand  a 
deposit  account  is  one  in  which  money  deposited  remains  l)y 
agreement  for  a  specified  time  and  draws  interest  at  a  speci- 
fied rate. 

Account  day.  This  term  is  used  loosely  on  the  London 
Stock  Exchange.  It  may  mean  any  of  the  days  during  which 
the  settlement  (see  Settlement.  The)  lasts,  but  more  usually  it 
means  pay  day;  that  is.  the  fourth  and  last  day  of  the  fort- 


SMITH'S  FINANCIAL  DICTIONARY.  ii 

nightly  settlement  on  the  exchange  when  transactions  for  the 
account  (see  Account,  The)  are  settled  (when  contracts 
entered  into  in  the  preceding  half-month  are  settled  by  cash 
payments). 

Account  days.  Account  days,  as  distinguished  from  account 
day,  are  the  four  days  occupied  in  the  fortnightly  settlement  of 
transactions  on  the  London  Stock  Exchange,  or  in  other 
words,  the  four  days  occupied  in  the  settlement  of  each  fort- 
nightly account.  For  additional  information  see  Settlement, 
The. 

Account  payable.  An  account  which  stands  as  a  debit  and 
to  close  which  payment  must  be  made. 

Account  receivable.  An  account  which  stands  as  a  credit 
and  to  close  which  payment  must  be  received. 

Account  rendered.  An  account  presented  by  a  creditor  to 
his  debtor;  it  shows  the  obligation  of  the  debtor  to  the  creditor 
and  in  the  absence  of  dissent  from  the  debtor  he  is  considered 
to  have  assented  to  its  correctness. 

It  is  the  practise  in  business  for  the  creditor  to  render  to  the 
debtor  on  the  first  of  each  month  an  account  for  the  pre- 
ceding month — that  is,  to  present  to  the  debtor  on  the  first  of 
the  month  a  statement  of  the  items  entered  against  him  in  the 
preceding  month. 

If  the  account  has  not  been  settled  when  the  first  of  the  suc- 
ceeding month  arrives  the  debit  and  credit  items  are  not  re- 
peated in  detail,  but  instead  a  statement  is  sent  to  the  debtor 
reading  "To  account  rendered"  and  naming  the  amount  due. 
If  in  the  intervening  month  new  items  have  been  entered 
against  the  debtor  these  in  detail  follow  the  "account  ren- 
dered" and  the  sum  of  them  is  added  to  the  amount  of  the 
"account  rendered." 

If  in  rendering  an  account  the  debit  items  are  partially  offset 
by  credit  items  the  difference  is  called  "balance  due."  Then, 
if  a  settlement  has  not  been  made  (the  balance  due  has  not 
been  paid)  when  the  statement  is  sent  to  the  creditor  on  the 
first  of  the  succeeding  month  the  statement  is  inscribed  "To 
balance  due,"  with  the  new  debit  and  credit  items  following. 

Account  sales.  A  statement  given  by  the  broker,  agent  or 
commission  merchant  showing  the  state  of  the  account  of  the 
one  to  whom  it  is  rendered. 


12  SMITH'S  -FINANCIAL  DICTIONARY. 


Account  stated.  Same  as  account  rendered;  the  term  ac- 
count rendered  is  given  preference  in  business  usage;  see  Ac- 
count rendered. 

Accrued  dividend.  The  proportion  of  a  regular  dividend  not 
yet  payable  that  has  accumulated  at  a  given  time  after  the  date 
of  the  payment  of  the  preceding  regular  dividend  is  called 
accrued  dividend. 

Cumulative  dividends  which  have  not  been  paid  as  they  fell 
due  are  sometimes  called  accrued  dividends,  but  the  correct 
term  for  them  is  accumulated  dividends ;  see  Cumulative  divi- 
dend. 

Accrued  interest.  The  amount  of  interest  not  yet  payable 
that  has  accrued  at  a  given  time  after  the  last  regular  payment. 

Instalments  of  interest  due  and  unpaid  are  accumulated 
interest,  as  distinguished  from  accrued  interest. 

Accumulated  dividends.  Cumulative  dividends  which  have 
not  been  paid  as  they  fell  due  but  instead  have  accumulated 
(have  been  added  together)  ;  see  Cumulative  dividend. 

Accumulated  interest.  Instalments  of  interest  due  and  un- 
paid.    Also  see  Accrued  interest. 

Accumulative  dividend.  Same  as  cumulative  dividend;  a 
dividend  which  if  not  paid  regularly  or  in  full  accumulates 
and  must  be  paid  in  the  future. 

Accumulative  stock.  Same  as  cumulative  stock ;  usually 
preferred  stock  the  dividends  on  which  if  not  paid  regularly 
or  in  full  accumulate  and  must  be  paid  in  the  future  before  a 
dividend  can  be  paid  on  the  common  stock. 

Acknowledgment.  A  declaration  or  admission  made  and 
signed  before  an  authorized  official,  such  as  a  notary,  commis- 
sioner or  judge ;  attached  to  bonds,  mortgages,  deeds,  etc. 

The  purpose  of  an  acknowledgment  is  to  furnish  satisfactory 
evidence  that  the  instrument  was  signed  by  the  person  whose 
name  it  bears  and  also  that  he  is  the  person  described  in  the 
instrument. 

For  forms  of  acknowledgment  in  surrendering  title  to  securi- 
ties see  Rules  for  delivery. 

Acquittance.  A  written  agreement  discharging  a  person 
from  an  obligation  to  pay  a  sum  of  money;  an  acknowledg- 
ment of  the  payment  of  a  debt. 

Acreage.     Area  in  acres.     This  term  is  commonly  employed 


SMITH'S  FINANCIAL  DICTIONARY.  ij 


in  referring  to  the  crops.  When  it  is  said,  for  instance,  that 
the  acreage  of  wheat  is  10,000,000  it  is  meant  that  10,000,000 
acres  of  land  is  given  up  or  devoted  to  the  growing  of  wheat. 

Action.      (Archaic).     A  share  in  a  stock  company. 

Also,  action  is  PVench  for  share  (of  stock). 

Also,  action  is  any  proceeding  instituted  in  a  court  of  law. 

Actionary  or  actionist.  (^Obsolete).  A  shareholder  in  a 
stock  company. 

Action  of  debt.     An  action  for  the  recovery  of  money  due. 

Active  account.  An  account  to  which  debits  and  credits  are 
frequently  added. 

An  active  account  in  a  bank  is  one  which  is  frequently  aug- 
mented by  deposits  and  likewise  is  frequently  diminished  by 
drafts  upon  (by  checks  drawn  against)  it. 

An  active  speculative  account  (as  in  stocks,  grain,  cotton  or 
cofifee,  etc.)  is  one  where  the  "^peculator  buys  and  sells  with 
frequency. 

Active  assets.  Assets  that  are  in  use  and  that  are  produc- 
tive. 

Active  capital.  Ready  money  or  property  readily  con- 
vertible into  money. 

Also,  active  capital  means  money  (or  the  representative  of  it 
in  any  form  that  may  take  the  place  of  or  serve  as  money) 
which  is  constantly  or  steadily  employed. 

Active  circulation.  Circulating  medium  (money)  outstand- 
ing; that  is,  actually  in  the  hands  of  the  public. 

Active  money.  As  a  money  market  term  active  money 
means  a  full  demand  for  the  available  supply  of  money  at  good 
rates  of  interest. 

Active  partner.  One  who  takes  an  active  part  in  the  busi- 
ness ;  who  participates  in  profits  and  is  liable  for  debts. 

Active  security.  An  active  stock  (or  bond)  is  one  freely 
dealt  in. 

An  active  stock  may  not  continue  active ;  it  may  relapse 
into  inactivity  and  then  it  becomes  and  is  classed  as  an  inac- 
tive stock. 

On  the  London  Stock  Exchange  the  term  active  is  applied 
to  securities  in  which  there  is  a  free  market  at  close  prices. 

Act  of  honor.  Same  as  for  honor.  See  Acceptance  for 
honor;  also  see  Pavment  for  honor. 


14  SMITH'S  FINANCIAL  DICTIONARY. 

Actual  assets.  Money,  or  property  of  true  or  certain  value, 
as  distinct  from  property  of  supposed  or  possible  or  nominal 
value. 

Actual  damages.     A  legal  term ;  real  or  express  damages. 

Actual  price.  The  price  at  which  a  transaction  is  actually 
made  as  distinguished  from  the  bid  price  (price  offered  by  the 
buyer)  and  asked  price  (price  asked  by  the  seller). 

Actual  rates  (of  foreign  exchange).  The  exact  rates  or 
prices  at  which  foreign  exchange  is  sold  in  large  amount.  For 
additional  information  see  Foreign  exchange  rates. 

Adjustable  currency.  Another  name  for  elastic  currency; 
see  Elastic  currency. 

Adjustment.  Regulation ;  arrangement.  In  a  voluntary 
financial  reconstruction  the  term  readjustment  is  vised;  see 
Readjustment. 

Adjustment  bond.  A  special  and  little  used  name  for  a 
bond  issued  for  the  adjustment  of  the  finances  of  a  company 
to  its  increased  need  for  funds  (money). 

For  example,  a  railroad  desires  additional  funds  for  im- 
provements or  extensions.  It  issues  adjustment  bonds  for 
the  purpose  and  these  are  an  original  or  first  lien  on  new  prop- 
erty or  are  a  lien  after  existing  liens  on  property  that  is  im- 
proved by  expenditures  on  it  from  the  proceeds  of  the  adjvist- 
ment  bonds. 

Adjustment  mortgage.  A  mortgage  that  usually  covers  or 
represents  improvements ;  usually,  also,  it  is  subsequent  in 
lien  or  claim  to  another  mortgage.  For  additional  informa- 
tion see  Adjustment  bond. 

Admission  to  dealings  at  the  New  York  Stock  Exchange. 
When  stocks  or  bonds  are  admitted  to  dealings  at  tlie  New 
York  Stock  Exchange  they  are  officially  announced,  if  placed 
on  the  regular  list,  as  having  been  "admitted  to  the  list;"  if 
not  placed  on  the  regular  list  they  are  announced  as  having 
been  "admitted  to  quotation  in  the  unlisted  department." 

There  is  very  little  difference  between  "admitted  to  the 
list"  and  "admitted  to  quotation  in  the  unlisted  department." 
The  chief  purpose  of  the  unlisted  department  is  to  provide 
for  deaHngs  in  securities  which  do  not  in  all  respects  meet  the 
requirements  for  admission  to  the  regular  list  as  it  is  com- 
monly called  ;  it  is  also  intended  to  provide  for  dealings  in  secu- 


SMITH'S  FINANCIAL  DICTIONARY.  15 

rities  of  new  companies  pending  the  perfecting-  of  their  or- 
ganizations and  the  completion  of  their  plans,  after  which  the 
securities  are  to  be  transferred  to  the  regular  list. 

The  requirements  that  must  be  complied  with  to  gain  for  an 
issue  of  stocks  or  bonds  admission  to  dealings  at  the  exchange 
are  stated  in  detail  in  a  printed  circular  designated  as  the 
"requirements  for  listing"  which  is  supplied  by  the  exchange 
for  the  information  of  companies  that  desire  to  have  their 
securities  dealt  in  at  the  exchange. 

A  company  must  furnish  proof  of  its  own  legality,  proof  of 
the  legality  of  title  to  its  property  and  proof  of  the  legality 
of  the  securities  issued  by  it ;  it  must  furnish  a  detailed  state- 
ment of  its  afifairs,  including  its  financial  condition;  must  fur- 
nish a  copy  of  its  charter  or  articles  of  incorporation,  a  copy  of 
its  by-laws.  etc.  Furthermore,  its  certificates  representing  its 
securities  must  meet  the  requirements  of  the  exchange  in 
their  form  and  in  the  engraving  and  printing  of  them  and 
also  in  the  denominations  for  which  they  are  made  out.  Like- 
wise, a  transfer  agent  (usually  a  trust  company  or  a  bank) 
must  be  appointed  or  a  transfer  office  established ;  also  a 
registrar  (usually  a  trust  company  or  a  bank)  must  be  ap- 
pointed. 

Only  certificates  for  stock  that  has  actually  been  issued 
(sold  or  otherwise  disposed  of  for  a  consideration)  are  ad- 
mitted to  dealings  and  the  same  is  the  case  with  bonds.  Stock 
which  has  never  been  issued  but  is  held  in  the  treasury  of  a 
company  is  not  admitted  and  the  same  is  the  case  with  bonds. 

In  the  dealings  on  the  stock  exchange  there  is  no  distinction 
between  "listed"  and  "unlisted"  stocks ;  the  same  privileges 
and  facilities  are  accorded  to  both  and  the  same  rules  apply 
to  both. 

An  application  to  admit  a  stock  (or  an  issue  of  bonds)  to 
the  list,  or  as  it  is  commonly  called,  regular  list,  first  goes  be- 
fore the  committee  on  stock  list,  which,  if  it  ascertains  that  all 
requirements  have  been  complied  with,  recommends  admission 
to  the  list ;  then  the  adoption  of  the  recommendation  by  the 
governing  committee  places  the  stock  on  the  list  and  permits 
dealings  in  it.  An  application  to  admit  a  stock  to  dealings  in 
the  unlisted  department  requires  approval  only  by  the  com- 
mittee on  tmlisted  securities. 


i6  SMITHS  FINANCIAL  DICTIONARY. 

When  a  stock  (or  other  security)  is  admitted  to  deaHngs  on 
the  London  Stock  Exchange  it  is  either  granted  an  official 
quotation,  that  is  to  say,  is  placed  in  the  official  list  published 
under  supervision  of  the  committee  for  general  purposes;  or 
if,  as  is  the  case  with  the  majority  of  mining  shares,  it  cannot 
fulfil  the  necessary  requirements  for  official  listing  it  is  dealt 
in  on  the  market  and  is  quoted  on  the  tape  and  in  the  news- 
papers if  of  sufficient  importance.  A  considerable  propor- 
tion of  the  securities  dealt  in  on  the  more  speculative  markets 
(see  Market)  are  not  included  in  the  official  list. 

Advance.  A  sum  paid  by  a  party  to  a  contract  on  account 
of  and  before  completion  of  the  same  ;  money  paid  before  it  is 
legally  due,  as  money  paid  against  a  consignment  of  goods 
received  but  not  yet  sold. 

Advance  as  used  in  speculation  in  stocks,  grain,  cotton, 
coflfee,  etc.,  means  an  upward  movement  in  prices. 

Advancement.  Same  as  advance ;  a  payment  of  money  be- 
fore it  is  due. 

Adventure.  The  importation  or  exportation  of  goods  on 
speculation.  The  term  is  almost  obsolete,  but  it  formerly 
was  commonly  applied  to  the  sending  of  goods  abroad  for  sale 
at  best  prices  obtainable,  the  goods  being  at  the  owner's  risk. 
The  term  now  generally  used  is  consignment. 

Also  see  Bill  of  adventure. 

Advice.  An  abbreviation  for  letter  of  advice  ;  see  Letter  of 
advice. 

Affreightment.  A  contract  by  which  a  vessel  is  hired  to 
carry  merchandise. 

Afloat.  A  word  used  in  the  grain  trade  to  designate  grain 
which  has  been  loaded  into  vessels  for  export  or  grain  which 
is  on  passage  but  has  not  arrived  at  destination. 

After  sight.  As  applied  to  a  bill  of  exchange  (draft)  this 
term  means  after  acceptance  by  the  drawee  (the  one  who  is 
to  pay  the  bill).  Thus,  sixty  days  after  sight  means  that  the 
bill  is  to  be  paid  sixty  days  after  the  date  of  acceptance. 

Agency.  An  agency  is  created  by  an  agreement  by  which 
one  person  delegates  to  another  authority  to  act  for  him. 

Agency  in  the  sense  of  influence  on  prices  in  the  specula- 
tive markets  means  the  same  as  factor  and  (sometimes)  ele- 
ment. 


SMITirS  FINANCIAL  DICTIONARY.  17 


Agend  or  agendum.  A  programme  of  the  business  to  be 
transacted  at  a  meeting  (as  a  meeting  of  a  stock  company). 

Asent.     One  authorized  to  transact  business  for  another. 

A  principal  is  responsible  for  the  act  of  an  agent,  but  the 
agent  who  exceeds  his  authority  renders  himself  personally 
liable. 

An  agent  cannot  bind  his  principal  by  any  act  performed 
contrary  to  instructions  unless  it  be  an  act  which  agents  of 
his  class  usually  have  authority  to  perform  and  the  person 
with  whom  he  is  dealing  is  ignorant  of  the  instructions  wdiich 
limit  the  agent's  powers  in  that  particular  case.  A  person 
dealing  wath  an  agent  is  entitled  to  assume  if  not  advised  to 
the  contrary  that  he  has  the  authority  usually  possessed  by 
agents  in  the  same  line  of  business.  If  a  person  dealing  with 
an  agent  knows  that  the  agent  is  acting  contrary  to  his  in- 
structions the  principal  is  not  l)()un(l  by  the  agent's  acts. 
Otherwise  he  is  bound. 

Any  commission  that  an  agent  undertakes  to  execute  he 
l)v  implication  represents  himself  as  able  to  do  in  a  reason- 
ably correct  and  successful  manner.  If  by  reason  of  his  ow-n 
ignorance  of  his  duties  as  agent  his  work  is  of  no  value  he 
cannot  charge  for  it. 

An  agent  is  bound  promptly  to  obey  all  proper  instructions 
of  his  principal  and  faithfully  and  particularly  to  account  for 
all  the  money  and  other  property  of  his  principal  wdiich  may 
have  come  into  his  hands.  Such  an  accounting  he  is  bound  to 
make  at  some  reasonable  time  without  special  instructions 
and  he  is  bound  to  make  it  at  any  time  wdien  he  is  called  upon 
to  do  so.  An  agent  who  persistently  disregards  his  principal's 
demand  that  he  shall  make  an  accounting  is  derelict  in  a  duty 
which  the  law  enforces  with  strictness  and  he  has,  thereby 
given  sufficient  cause  for  his  dismissal,  ^^"hen  a  reasonable 
time  has  elapsed  after  the  demand  for  an  accounting  and  the 
agent  has  no  valid  excuse  for  a  failure  to  make  it,  as  sickness 
or  unavoidable  accident,  he  may  be  discharged. 

An  agent  having  the  custody  of  his  principal's  property  is 
bound  to  insure  it  if  instructed  to  do  so.  Moreover,  he  is 
bound  to  insure  it  without  s]>ecial  instruction  if  it  has  been 
his  own  custom  or  if  it  is  a  common  custom  of  asfents  having 


28  SMITH'S  FINANCIAL  DICTIONARY. 


the  custody  of  property  of  that  kind  to  insure  it  without  in- 
struction to  do  so.  The  owner  of  property  is  justified  in  sup- 
posing that  the  usual  custom  will  be  followed  by  his  agent  in 
caring  for  the  property  without  any  special  instruction  and 
in  the  event  of  the  agent's  failure  to  follow  the  custom  he  is 
liable  for  a  loss  suffered  by  his  principal  through  such  neglect. 
In  any  other  case  he  is  not  bound  to  insure  unless  he  receives 
specific  direction  to  do  so. 

If  an  agent  (or  executor  or  trustee  or  attorney)  deposits  in 
a  bank  ur  other  depository  in  his  own  name  money  which  he 
holds  in  trust  it  shall  be  the  agent's  loss  in  case  the  bank  (or 
depository)  fails.  The  reason  of  the  rule  is  that  an  agent 
cannot  be  allowed  to  determine  after  a  loss  whether  the 
money  on  deposit  was  his  own  or  that  held  by  him  in  trust. 
The  presumption  is  that  a  deposit  belongs  to  the  depositor 
and  the  agent  (who  is  a  trustee)  is  not  allowed  by  the  courts 
to  dispute  that  presumption  after  a  loss.  If  the  agent  wishes 
to  charge  his  principal  with  the  loss  if  any  should  occur  he 
must  state  to  the  principal  when  the  dej^osit  is  made  that  it  is 
the  money  of  the  principal  and  not  his  own  ;  that  he  is  not 
only  an  agent  but  that  in  this  particular  transaction  he  is 
acting  in  that  capacity. 

If  there  is  nothing  in  an  agreement  to  the  contrary  a 
broker's  commission  is  earned  when  a  sale  has  been  made  and 
all  that  he  engaged  to  do  has  been  done.  Whether  the  con- 
tract into  which  the  buyer  and  seller  have  entered  as  a  result 
of  the  broker's  negotiation  is  carried  out  or  not  has  no  effect 
upon  the  validity  of  the  broker's  claim  for  his  commission.  If 
there  is  nothing  in  the  agreement  and  if  tliere  is  no  trade 
usage  to  the  contrary  a  broker's  commission  is  due  and  pay- 
able as  soon  as  earned.  On  the  other  hand,  if  the  exact 
amount  of  a  l^roker's  commission  in  any  ])articular  transaction 
is  to  be  ascertained  at  some  time  after  the  transaction  is  made 
the  broker  cannot  claim  any  part  of  the  sum  until  the  full 
amount  is  determined. 

One  may  after  ceasing  to  act  as  agent  of  another  find  that 
the  results  of  his  efforts  are  still  availed  of  by  his  former 
emphner.  llis  ])articular  methods  uf  doing  l)usiness  and  his 
list  of  customers  are  both  likclx-  to  hv  familiar  to  the  employer, 
who  nv,\\  make  any  use  of  them  he  sees  tit  \yhicli  is  mM  fraudu- 


SMITH'S  FINANCIAL  DICTIONARY.  19 

lent.     Such  use  can  be  prevented  only  by  a  contract  between 
the  principal  and  agent. 

For  additional  information  see  Principal. 
Agent  de  change.     The  title  of  a  member  of  the  Paris  and 
other    European    bourses.     On    the    Berlin    Bourse    there    are 
agents  de  change  and  sworn  agents  de  change,  the  latter  deal- 
ing chiefly  in  government  securities. 

On  the  Vienna  Bourse  there  are  only  sworn  agents  de 
change,  who  are  under  control  of  the  government. 

The  German  spelling  of  bourse  is  boerse. 

For  particular  information  as  to  the  Paris  Bourse  see  Paris 
Bourse. 

Agio.  The  premium  payable  for  the  exchange  of  one  kind 
or  quality  of  money  into  another;  a  deduction  for  deprecia- 
tion of  coin  by  wear. 

Agiotage.  A  little  used  term  for  money-changing  or  for 
brokerage  in  foreign  moneys. 

Agreement.  A  contract  or  instrument  expressing  terms 
agreed  upon  between  two  or  more  persons. 

AJ.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  adjustment,  as  adjustment  bonds. 

A  I'escompte.  On  the  Paris  Bourse  a  party  who  has  sold 
for  future  delivery  can  be  required  to  deliver  securities 
a  I'escompte  (under  discount)  at  an  earlier  date  than  that 
named  in  the  contract  if  a  demand  for  delivery  is  made  by  the 
buyer. 

Allison  act.  The  usual  designation  is  the  Bland-Allison 
act;  the  act  (Allison's  amendment  of  the  Bland  bill)  which  was 
passed  over  the  veto  of  President  Hayes  and  became  a  law 
February  28,  1878,  providing  for  the  purchase  by  the  govern- 
ment of  not  less  than  $2,000,000  and  not  more  than  $4,000,000 
worth  of  silver  bullion  each  month  and  the  coinage  of  it  into 
silver  dollars,  these  to  be  legal  tender.  It  was  superseded  by 
the  so-called  Sherman  act,  which  see. 

Allocation.  Apportionment;  allotment:  assignment.  The 
term  allocation  of  stock  is  occasionally  used,  meaning  allot- 
ment of  stock. 

Allonge.  A  piece  of  paper  attached  to  a  (foreign)  bill  of 
exchange  to  receive  indorsements  for  which  the  original  does 
not  afford  space. 


20  SMITH^S  FINANCIAL  DICTIONARY. 

Allotment.     Share  or  portion. 

An  allotment  in  an  underwriting  is  the  amount  assigned  to 
a  member  of  (subscriber  to)  the  underwriting  syndicate.  An 
allotment  of  an  issue  of  stock  or  bonds  is  the  amount  assigned 
to  a  subscriber,  which  may  be  less  than  the  amount  applied 
for  if  the  total  subscription  exceeds  the  total  amount  offered 
for  subscription. 

Allotment  and  regret.  When  an  issue  of  stock  has  been 
oversubscribed  a  letter  of  allotment  and  regret  is  sent  to  each 
subscriber  informing  him  of  the  number  of  shares  allotted  to 
him  and  expressing  regret  that  the  full  amount  applied  for 
could  not  be  allotted. 

Allotment  letter.  A  letter  informing  an  applicant  for  securi- 
ties of  a  new  company  (or  new  securities  of  an  existing  com- 
pany) of  the  amount  allotted  to  him. 

Allottee.  An  applicant  for  securities  of  a  new  company  or 
for  new  securities  of  an  existing  company  who  receives  a  part 
or  the  whole  of  the  securities  that  he  has  applied  for. 

All-'round  price.  Same  as  overhead  price ;  a  price  which 
covers  cost  and  all  charges,  including  what  usually  are  extra 
charges. 

Alongside.  A  commercial  term.  Goods  delivered  along- 
side are  goods  delivered  at  or  by  the  side  of  the  ship  in  which 
they  are  to  be  cargo. 

American  market.  Designation  for  the  group  of  jobbers 
on  the  London  Stock  Exchange  who  deal  exclusively  in  Amer- 
ican securities ;  also  the  place  where  they  congregate  is  called 
the  American  market.  Canadian  Pacific  Railway  shares  are 
dealt  in  in  the  Ameiican  market ;  but  those  of  the  Grand  Trunk 
Railway  of  Canada  are  dealt  in  in  a  separate  department. 

American  rails.  London  Stock  Exchange  name  for  the 
stocks  of  American  railroads. 

Americans.  A  designation  on  the  London  Stock  Exchange 
for  American  stocks  and  bonds;  not  securities  of  the  United 
States  government,  but  American  railroad  and  industrial  secu- 
rities ;  the  name  Yankees  also  is  used. 

American  stocks  in  London.  In  dealings  in  American 
stocks  on  the  London  Stock  Exchange  4  shillings  is  counted  as 
St.  Four  shillings  being  equal  to  97  T-3  cents  the  price  of  an 
American  stock  must  be  2  2-3  per  cent    rquotably  2   5-8  per 


SMITHS  I'lNANCTAL  DICTIONARY.  21 

» 

cent)  higher  in  London  than  in  New  York  if  the  London 
price  is  to  be  equivalent  to  (or  at  a  parity  with)  the  New  York 
price.  Not  2  5-8  per  cent  of  the  par  or  face  value  is  to  be 
added  arbitrarily  to  the  New  York  price,  but  2  5-8  per  cent  of 
the  New  York  price,  whatever  it  may  be,  is  to  be  added  to  the 
New  York  price  to  make  an  equivalent  London  price. 

Thus,  for  a  stock  selling  at  50  in  New  York  the  equivalent 
price  in  London  would  be  51  3-8  (while  the  fraction  3-8  is  not 
strictly  correct  it  is  quotably  correct).  For  a  stock  selling  at 
100  in  New  York  the  equivalent  price  in  London  would  be 
102  5-8.  Conversely,  for  a  stock  selling  at  100  in  London  the 
equivalent  price  in  New  York  would  be  97  3-8  and  for  a  stock 
selling  at  50  in  London  the  equivalent  price  in  New  York 
would  be  48  5-8. 

Amortization  or  amortizement.  The  extinction  or  reduc- 
tion of  a  debt  by  means  of  a  sinking  fund. 

Ancillary  receiver.  An  assistant  receiver,  as  a  receiver  in 
one  state  of  the  property  of  a  company  which  is  domiciled 
(chartered  or  incorporated)  and  has  its  chief  place  of  business 
in  another  state.  The  receiver,  as  distinguished  from  the  an- 
cillary receiver,  is  situated  in  and  derives  his  authority  from 
the  state  w^here  the  company  is  domiciled. 

And  interest.  When  a  bond  is  sold  at  a  fixed  price  "and 
interest"  the  interest  which  has  accrued  or  accumulated  on  it 
up  to  the  date  of  the  transaction  is  added  to  the  fixed  price. 
The  fixed  price  with  the  interest  added  is  the  total  price. 

For  instance,  if  a  bond  is  sold  at  100  and  i  per  cent  in  inter- 
est has  accrued  on  it  the  total  cost  of  the  bond  is  loi. 

Annuity.  A  fixed  allowance  or  income  received  in  one  or 
more  payments  annually. 

Many  insurance  companies  sell  annuities — that  is,  in  con- 
sideration of  a  specified  sum  paid  to  them  they  will  return 
(pay)  to  the  person  for  whom  the  annuity  is  bought  so  much 
per  vear  during  his  or  her  lifetime  or  for  a  specified  time. 

The  oflficial  title  of  what  are  commonly  known  as  British 
consols  is  "consolidated  annuities."  The  word  annuity  means 
a  promise  to  pay  so  much  per  annum,  either  for  the  life  of  the 
lioldcr  or  for  a  fixed  period  or  in  perpetuity.  Annuities, 
generally  terminable  at  a  fixed  date,  have  been  issued  in  pay- 


22  SMITH'S  FINANCIAL  DICTIONARY. 


ment  for  several  of  the  Indian  railways  that  have  been  pur- 
chased by  the  Indian  government. 

Anthracite  coal.  Commonly  called  hard  coal ;  mineral  coal, 
with  a  bright,  sub-metallic,  iron-black  lustre,  consisting  of 
nearly  pure  carbon  and  burning  almost  without  flame.  It  is 
graded  into  eight  sizes:  Buckwheat  (the  smallest  size),  pea, 
cherry,  chestnut,  stove,  egg,  broken  and  steamship  (the  largest 
si^e). 

Anthracite  coal  contains  a  very  small  amount  of  volatile 
matter.  Anthracite  proper  contains  from  3  to  10  per  cent  of 
such  matter;  graphitic  anthracite  contains  from  i  to  3  per 
cent.  Anthracite  coal  is  found  in  commercial  quantity  in  the 
United  States  only  in  the  state  of  Pennsylvania. 

Anti-gold  law.  Just  before  the  retirement  of  Secretary  Sal- 
mon P.  Chase  from  the  Treasury  Department  he  induced  Con- 
gress to  pass  a  bill  to  "prohibit  certain  sales  of  gold  and  foreign 
exchange."  Its  object  was  to  prevent  speculation  in  gold  in 
the  Gold  Room  in  New  York.  It  prohibited  the  purchase  or 
sale  of  gold  or  foreign  exchange  except  at  the  regular  office  of 
the  purchaser  or  seller  and  also  surrounded  transactions  in 
both  with  further  restrictions. 

The  idea  behind  the  measure  was  that  it  would  render  the 
price  of  gold  more  stable.  The  effect  was  exactly  the  oppo- 
site. The  law  went  into  efifect  on  June  17,  1864.  The  next 
day  the  price  of  gold  had  jumped  10  per  cent;  the  following- 
day  22  per  cent  was  added  to  the  price,  and  within  two  weeks 
it  had  advanced  20  per  cent  more  to  250.  On  July  2,  1864,  the 
act  was  repealed  without  debate. 

A  one.  Written  Ai  ;  a  designation  signifying  first  class  or 
without  a  superior. 

APD.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  assessment  paid. 

Appropriation.  Money  set  apart  for  a  special  use ;  also  the 
application  of  property  of  a  debtor  to  one  of  several  debts. 

Arbitrage.  The  buying  and  selling  of  the  same  thing  in 
different  markets,  as  New  York  and  London,  for  the  purpose 
of  making  a  profit  from  the  difference  in  quotations  between 
such  markets ;  said  chiefly  of  dealings  in  stocks  and  bonds,  but 
also  of  dealings  in  exchange. 

Arbitrage  in   stocks  is  based  and  conducted  on  temporary 


SMITH'S  FINANCIAL  DICTIONARY.  23 

differences  in  prices  between  ditterent  markets  for  the  same 
stocks.  In  ordinary  circumstances  every  stock  has  the  same 
value  in  every  market  in  which  it  is  dealt  in. 

When  a  stock  is  selling  at  a  higher  price  in  one  market  than 
in  another  ii  is  sold  in  the  market  where  the  higher  price  pre- 
vails and  is  bought  in  the  market  where  the  lower  price  pre- 
vails. The  operator  relies  on  a  return  to  the  same  price  in 
both  markets.  \\'hen  the  equality  in  price  is  restored  he 
closes  his  transaction  by  buying  where  he  sold  and  selling 
where  he  bought.  The  difference  in  price  that  had  existed 
represents  his  profit  when  the  equality  in  price  is  restored  and 
his  transaction  is  closed. 

For  example,  if  a  stock  is  selling  in  one  market  at  100  and 
in  another  at  98  it  is  sold  in  the  first  market  at  100  and  bought 
in  the  second  market  at  98.  If  the  stock  in  the  second  market 
advances  to  100  while  it  remains  stationary  in  the  first  market 
it  is  sold  in  the  second  market  and  2  per  cent  is  made  on  the 
transaction  there,  and  it  is  bought  in  the  first  market  at  100 
and  neither  profit  nor  loss  results  from  the  transaction  there. 
Or,  if  the  stock  declines  to  99  in  the  first  market  and  advances 
to  99  in  the  second  market  the  closing  of  the  transaction 
results  in  a  profit  of  i  per  cent  in  each  market  or  2  per  cent  in 
the  two  markets. 

Owing  to  the  system  of  calculating  values  for  American 
stocks  on  the  London  Stock  Exchange  prices  on  the  London 
exchange  are  2  5-8  per  cent  of  the  market  prices,  whatever  they 
may  be,  higher  than  the  prices  for  the  same  stocks  on  the  New 
York  Stock  Exchange  when  they  are  the  equivalent  of  the 
prices  on  the  New  York  exchange.  In  arbitrage  dealings 
allowance  has  to  be  made  for  this  difference  in  prices  between 
London  and  New  York,  which  is  seeming  and  not  actual.  For 
a  completer  explanation  see  American  stocks  in  London. 

The  difference  in  equivalent  prices  between  New  York  and 
London  permits  two  kinds  of  operations  in  stocks  that  are 
dealt  in  in  both  markets.  One  operation  is  called  a  spread 
and  the  other  is  called  a  back  spread. 

In  the  spread  there  must  be  more  than  the  normal  differ- 
ence in  prices  between  London  and  New  York.  The  stock  is 
sold  in  London  where  the  higher  price  prevails  and  is  bought 
in  New  York  where  the  lower  price  prevails.     Then  when  the 


24  SMITH'S  FINANCIAL  DICTIONARY. 


equality  in  price  is  restored  the  transaction  is  closed  by  buying 
in  London  and  selling  in  New  York.  The  profit  is  the  amount 
of  the  difference  that  had  existed  in  excess  of  the  normal  differ- 
ence. 

For  example,  when  a  stock  is  selling  in  Xew  York  at  lOO 
the  equivalent  price  in  London  is  102  5-8.  Should  the  stock 
while  selling  in  New  York  at  100  be  selling  in  London  at 
104  5-8  the  normal  difference  would  be  exceeded  by  2  per  cent. 
The  speculator  would  sell  in  London  at  104  5-8  and  buy  in 
New  York  at  100.  Should  the  price  in  London  drop  2  per 
cent  he  would  buy  in  London  at  102  5-8  and  on  the  transac- 
tion there  would  make  2  per  cent,  while  he  would  sell  in  New 
York  at  100  and  on  the  transaction  there  would  neither  gain 
nor  lose.  Should  there  be  a  decline  of  i  per  cent  in  London 
and  an  advance  of  i  per  cent  in  New  York  in  restoring  the 
equality  or  equivalent  in  prices  there  would  be  a  profit  of  i 
per  cent  in  each  place  or  2  per  cent  in  the  two  places. 

In  the  back  spread  there  must  be  less  than  the  normal 
difference  in  prices  between  New  York  and  London.  The 
stock  is  bought  in  London  where  the  higher  price  prevails  and 
is  sold  in  New  York  where  the  lower  price  prevails.  Then 
when  the  equality  is  restored  the  transaction  is  closed  by  sell- 
ing in  London  and  buying  in  New  York.  The  profit  is  the 
amount  of  the  difference  that  had  existed  less  than  the  normal 
difi'erence. 

For  example,  when  a  stock  is  selling  at  100  in  I^ondon  the 
equivalent  price  in  New  York  is  97  3-8.  Should  the  stock 
while  selling  in  New  York  at  97  3-8  be  selling  in  London  at 
98  the  difference  in  price  would  be  2  per  cent  less  than  the 
normal  difference.  The  speculator  would  sell  in  New  York 
at  97  3-8  and  buy  in  London  at  98.  Should  the  price  in  Lon- 
don advance  2  per  cent  while  the  price  in  New  York  re- 
mained stationary  he  would  sell  in  London  at  100  and  on  the 
transaction  there  would  make  2  per  cent,  and  he  would  buy 
in  New  York  at  97  3-8  and  on  the  transaction  there  would 
neither  gain  nor  lose.  Should  there  be  a  decline  of  i  per  cent 
in  New  York  and  an  advance  of  i  per  cent  in  London  in 
restoring  the  equality  or  equivalent  in  prices  there  would  be  a 
profit  of  T  per  cent  in  each  place  or  2  per  cent  in  the  two  places. 

The  arbitrage  business  in   stocks  between   New  York  and 


S}JITIiS  FINANCIAL  DICTIONARY 


London  is  large.  When  stocks  are  bought  in  New  York  and 
sold  in  London,  or  are  sold  in  New  York  and  bought  in  Lon- 
don, the  cable  is  used  for  the  transmission  of  orders  from  one 
place  to  the  other. 

By  the  clock  London  is  five  hours  ahead  of  New  York. 
When  the  New  York  Stock  Exchange  opens  it  is  lo  a.  m.  in 
New  York,  but  it  is  then  3  p.  m.  in  London.  The  London 
Stock  Exchange  opens  at  11  a.  m.  and  closes  at  4  p.  m.  except 
on  the  last  day  of  the  account  (see  Account,  The),  when  it 
closes  at  4.30  p.m.     On  Saturday  1.30  p.m.  is  the  closing  time. 

After  the  closing  of  the  London  exchange  the  business  in 
American  stocks  continues  in  the  street,  in  Shorter's  court. 
In  this  street  market  a  good  part  of  the  arbitrage  business  in 
American  stocks  is  conducted.  Very  little  arbitrage  business 
is  transacted  in  New  York  before  the  opening  of  the  New 
York  Stock  Exchange.  The  most  that  is  done  is  to  send 
orders  to  London  for  execution.  No  orders  are  executed  in 
New  York  until  the  New  York  Stock  Exchange  opens  for  the 
reason  that  there  is  no  street  market  in  New  York.  For  an- 
other thing  it  is  too  early  in  the  day.  When  the  London  ex- 
change opens  at  11  a.  m.  it  is  only  6  a.  m.  in  New  York. 

The  London  brokers  remain  in  Shorter's  court  as  long  as 
there  is  business  to  keep  them,  but  ordinarily  they  cease  deal- 
ings at  5  o'clock  or  soon  after.  The}^  seldom  continue  trans- 
actions later  than  6  o'clock. 

The  orders  sent  from  New  York  to  be  executed  in  London 
and  those  sent  from  London  to  be  executed  in  New  York  are 
"rushed"  by  the  cable  companies,  for  it  is  a  profitable  business 
for  the  companies.  It  takes  very  few  minutes  to  effect  an 
arbitrage  transaction  by  cable. 

It  is  the  efifort  in  arbitrage  dealings  to  balance  transactions 
racli  day — that  is,  to  sell  as  mau}^  stocks  as  are  bought  or  to 
buy  as  manv  stocks  as  are  sold.  When  the  sellinc:  exceeds 
the  buying  the  excess  selling  is  designated  as  selling  on  bal- 
ance:  w^hen  the  buying  exceeds  the  selling  the  excess  buying 
is  designated  as  buying  on  balance.  The  next  day,  if  possible, 
the  discrepancy  is  adjusted. 

Sometimes  arbitrage  transactions  in  stocks  cannot  be  evened 
up  in  the  usual  Avay  and  stock  certificates  have  to  be  shipped 
to  efifect  an  adjustment. 


26  SMITH'S  FINANCIAL  DICIIONARV. 

There  is  arbitrage  in  grain,  cotton,  cottee,  etc.,  between 
different  markets  in  one  country  or  between  a  market  in  one 
country  and  a  market  in  another  country  the  same  as  in 
stocks  between  New  York  and  London.  For  examples  see 
Spread ;  also  see  Back  spread. 

The  term  arbitration  is  more  commonly  used  than  arbitrage 
in  reference  to  operations  in  exchange  that  are  based  on 
differences  in  prices  between  different  markets.  For  informa- 
tion see  Arbitration  of  exchange. 

Arbitrage  broker.  One  who  handles  arbitrage  business. 
For  information  see  Arbitrage. 

Arbitrager  or  arbitrageur  or  arbitragist.  One  who  is  en- 
gaged in  arbitraging.     For  information  see  Arbitrage. 

Arbitraging.  Dealing  in  two  markets  to  profit  by  the  differ- 
ence in  prices. 

In  stocks  an  arbitrage  business  may  be  conducted  between 
New  York  and  London  or  between  New  York  and  Boston  or 
between  New  York  and  any  other  market.  Grain,  cotton,  etc., 
are  dealt  in  under  the  same  conditions.  For  additional  in- 
formation see  Arbitrage. 

Arbitration  of  exchange.  A  calculation  based  on  rates  of 
exchange  to  determine  the  difference  in  money  values  at  three 
or  more  places ;  or,  a  calculation  based  on  the  money  values  at 
three  or  more  places  to  determine  the  ratio  of  exchange  be- 
tween the  different  places.  Where  three  places  are  concerned 
the  calculation  is  called  simple  arbitration ;  where  more  than 
three  places  are  concerned  the  calculation  is  called  compound 
arbitration. 

As  an  operation  (as  distinguished  from  a  calculation)  arbi- 
tration of  exchange  consists  in  dealing  for  profit  in  exchange 
between  three  or  more  places.  The  profit  is  derived  from 
the  difference  in  the  rates  of  exchange  on  the  several  places. 

As  an  example  of  simple  arbitration  of  exchange  a  banker 
in  New  York  sells  a  bill  of  exchange  on  London  and  covers  it 
(pays  it)  by  forwarding  to  London  a  bill  on  Paris  for  an 
equivalent  amount  purchased  by  him  (the  banker)  at  a  lower 
price.  Or,  the  banker  in  New  York  buys  a  bill  on  London  and 
sells  against  it  a  bill  on  Paris,  which  latter  bill  (the  bill  on 
Paris)  he  co\-ers  by  forwarding  to  Paris  in  payment  of  it  the 


SMITH'S  FINANCIAL  DICTIONARY.  27 

bill  on  London.  Simple  arbitration  of  exchange  ii  a  iri- 
angular  operation  in  exchange. 

As  an  example  of  compound  arbitration  of  exchange  a 
banker  in  New  York  sells  a  bill  on  London,  buys  a  bill  on  Ber- 
lin and  with  the  bill  on  Berlin  buys  in  Paris  a  bill  on  London 
to  cover  (pay)  the  bill  on  London  sold  by  him  (the  banker). 
Or,  the  banker  in  New  York  buys  a  bill  on  London,  sells  a 
bill  on  Berlin  and  with  the  bill  on  London  buys  in  Paris  a  bill 
on  Berlin  to  cover  (pay)  the  bill  on  Berlin  sold  by  him  (the 
banker).  When  four  points  are  involved  the  term  quad- 
rangular operation  applies. 

Arbitration  of  exchange  may  be  extended  so  as  to  include 
tive  or  six  or  more  places. 

Area.  Space  or  extent  as  measured  in  square  miles,  acres 
or  square  feet.  A\'hen  the  term  is  used  in  referring  to  the 
crops  it  means  the  area  or  extent  in  acres.  Thus,  when  it  is 
said,  for  instance,  that  the  area  of  wheat  is  10,000,000  it  is 
meant  that  10,000,000  acres  of  land  is  given  up  or  devoted  to 
the  growing  of  wheat. 

Arrha.  The  Latin  term  for  earnest  money;  that  is,  money 
given  to  bind  a  bargain. 

Article.  In  making  exchanges  at  the  Bankers'  Clearing 
House  in  London  the  term  article  means  a  check,  draft  or 
other  paper  calling  for  payment.  The  term  employed  in  the 
United  States  is  item  or  collection  item. 

Articles  of  agreement.  The  written  terms  of  a  bargain, 
contract,  or  covenant. 

Articles  of  association.  Another  name  for  articles  of  incor- 
poration, but  in  the-  United  States  the  term  articles  of  asso- 
ciation applies  to  a  social,  political,  mutual-benefit,  benevo- 
lent or  similar  organization  of  individuals  more  particularly 
than  to  a  joint-stock  company.     See  Articles  of  incorporation. 

In  Great  Britain  the  term  articles  of  association  means  the 
table  of  conditions  imder  which  a  joint-stock  company  is  con- 
stituted. They  apply  only  to  the  internal  regulations  of  the 
company.  For  additional'  information  see  ^Temorandum  of 
association. 

Articles  of  incorporation.  The  certificate  filed  in  conform- 
ity with  a  general  law  by  persons  who  desire  to  form  a  cor- 
poration   (joint-stock  company)    setting    forth    the    purposes 


^8  SMITH'S  FINANCIAL  DICTIONARY. 

of  the  corporation,  etc.  This  certificate  is  often  wrongly  called 
a  charter;  see  Charter. 

Asked  price.  The  price  asked  for  a  thing.  For  additional 
information  see  Bid  and  asked. 

As  per  advice.  A  term  frequently  used  in  a  bill  of  exchange, 
meaning  that  notice  has  been  given  (or  is  to  be  given)  to  the 
drawee  (the  one  who  is  to  pay  the  bill)  that  the  bill  has  been 
drawn  upon  him. 

As  per  indorsement.  Occasionally  when  a  foreign  bill  of 
exchange  is  drawn  in  the  money  of  the  country  where  it  origi- 
nates but  is  payable  in  another  country  it  is  made  payable  "as 
per  indorsement" — that  is,  it  is  payable  in  the  money  of  the 
second  country  at  the  rate  of  exchange  indorsed  on  the  bill. 

Example :  If  a  person  in  New  York  draws  on  a  person  in 
London  for  $25,000  the  rate  at  which  it  is  to  be  paid  in  pounds 
sterling  is  indorsed  on  it.  Thus,  if  payable  at  $4.86  per  pound 
each  p(jund  counts  as  $4.86  in  paying  the  bill. 

Assay  office.  A  laboratory  for  examining  ores,  usually  gold 
and  silver,  to  determine  their  economic  value. 

The  term  usually  applies  to  an  establishment  (there  are 
several  such)  maintained  by  the  United  States  government  to 
refine  gold  and  silver  delivered  to  it  in  ingots.  It  will  refine 
the  gold  or  silver  for  a  compensation  and  return  it,  or  it  will 
buy  gold  refined  by  it,  paying  for  it  with  an  order  on  the  Unit- 
ed States  Treasury  for  gold  coin  (or  gold  certificates)  to  an 
equal  amount.     It  is  not  permitted  to  buy  silver. 

Assay  office  bar.  A  bar  of  fine  (pure)  gold  or  silver  as- 
sayed (and  manufactured)  by  an  assay  office  belonging  to 
the  United  States  government. 

A  bar  assayed  by  a  private  concern  is  designated  as  a  com- 
mercial bar. 

Assay  office  check.  A  check  on  the  United  States  Treasury 
drawn  by  an  assay  office  and  given  in  payment  for  gold  de- 
posited in  the  assay  office. 

Assented  stocks  or  bonds.  Stocks  or  bonds  deposited 
under  an  agreement  by  which  the  owners  assent  to  some 
change  in  the  status  of  the  securities. 

In  reorganizations  that  are  voluntary,  or  in  other  words, 
without  foreclosure  or  other  legal  process,  the  owners  assent 
In   the   exchanfrc  of  their  stocks  or  bonds,   or  both,  for  new 


SMlTJrS  l-LXAW  lAL  UlC'l'lUNAKY.  29 

issues,  perhaps  less  in  amount  and  perhaps  receiving  less  in 
dividends  or  interest.  For  additional  information  see  Re- 
adjustment. 

Assessment.  The  name  applied  to  a  demand  or  call  from  a 
company  upon  stockholders  to  pay  into  the  treasury  of  the 
company  a  specified  sum  per  share.  It  is  common  in  the 
reorganization  of  a  concern  to  levy  an  assessment  on  the  stock 
to  obtain  funds  for  the  discharge  of  debts  and  for  working 
capital. 

Asset  currency.  Currency  secured  by  the  general  assets  of 
the  issuing  bank  instead  of  by  government  bonds  as  at  present 
under  the  Nationail  bank  act. 

The  two  essentials  for  this  form  of  currency  are  safety  and 
elasticity.  There  is  general  agreement  as  to  the  desirability 
of  a  currency  that  shall  be  responsive  to  the  demands  of  busi- 
ness, expanding  in  volume  when  trade  is  l)risk  and  contracting 
in  the  dull  intervals,  thus  insuring  stability  of  interest  rates 
and  preventing  stringency  at  one  period  and  redundancy  at 
another. 

Gold  and  silver  money  and  the  government  issues  of  paper 
money  are  practically  permanent  in  volume,  except  that  as 
new  gold  is  brovight  to  the  mint  it  gradually  increases  the 
supply  Init  affords  no  opportunity  for  alternate  expansion 
and  contraction. 

The  present  national  bank  notes  are  issued  under  such  con- 
ditions of  bonded  security  as  to  make  them  almost  equally 
irresponsive  to  varying  business  requirements.  They  have, 
moreover,  a  tendency  toward  disappearance,  partly  because 
there  is  scarcely  enough  profit  in  them  to  warrant  the  trouble 
of  issuing  them  and  partly  because,  with  the  gradual  payment 
of  the  national  debt,  the  supply  of  bonds  available  for  security 
will  eventually  be  too  insignificant  to  be  of  use. 

The  need  for  an  automatically  elastic  currency  is  a  con- 
stantly growing  factor  in  the  business  world.  The  nature  of 
the  need  may  be  seen  from  the  movements  of  money  during 
the  harvest  season  in  the  West  and  Northwest  and  the  cotton 
picking  season  in  the  South.  At  such  times  large  sums  in 
currency  are  withdrawn  from  the  financial  centres  and  scat- 
tered over  a  large  area  of  the  country.  When  the  particular 
activitv  which   attracted  these  funds  is  over  and  the  imme- 


30  SMITH'S  FINANCIAL  DICTIONARY. 

diate  use  for  them  has  passed  they  naturally  How  back  in 
search  of  profitable  occupation  in  the  money  centres.  These 
alternate  movements,  from  whatever  cause  they  arise,  natu- 
rally result  in  a  plethora  of  money  at  one  time  and  a  scarcity 
at  another,  driving  interest  rates  up  and  down  and  generally 
disturbing  business. 

The  object  of  an  elastic  currency  -would  therefore  be  to 
supply  extra  funds  when  more  money  is  needed  for  temporary 
purposes  and  to  retire  those  funds  from  circulation  when  they 
are  not  needed,  preventing  fluctuation  in  interest  rates  and 
automatically  adjusting  the  supply  of  money  to  the  varying 
conditions  of  business. 

It  is  generally  conceded  that  such  a  currency  can  be  ob- 
tained only  through  the  instrumentality  of  banking  credit. 
By  far  the  larger  part,  more  than  95  per  cent,  of  the  business 
of  the  country  is  transacted  by  means  of  l)aiik  credits  ex- 
pressed through  the  medium  of  checks  and  drafts  (bills  of 
exchange).  These  credits  adjust  themselves  automatically 
imder  the  wise  supervision  of  bank  officials.  It  is  urged  that 
the  same  principle  could  be  applied  to  the  issuing  of  bank 
notes  as  another  form  of  credit  which  would  1)e  available  in 
small  transactions  as  bank  checks  are  in  large. 

In  order  to  accomplish  this  it  would  be  necessary  to  author- 
ize banks  to  issue  notes  against  their  general  assets  and  repu- 
tation. What  restrictions  should  be  exercised  to  prevent 
abuse  of  the  authority  is  the  crucial  question  in  the  contro- 
versy. A  depositor  in  a  bank  risks  his  money  and  his  credit 
with  a  knowledge  of  the  general  standing  of  the  bank,  its 
stockholders  and  its  officers,  and  of  its  condition  as  shown  by 
its  reports.  A  man  who  accepts  a  check  drawn  on  a  bank  has 
knowledge  both  of  the  bank  and  of  the  man  who  signs  the 
check.  A  man  who  accepts  the  note  of  a  bank,  perhaps  thou- 
sands of  miles  from  its  place  of  origin,  cannot  have  this  in- 
formation, therefore  the  restrictions  under  which  the  note  is 
issued  must  be  such  as  to  safeguard  in  a  general  way  liis 
interest  and  insure  his  protection  against  loss  or  the  system 
will  fall  and  the  bank  notes  will  fail  to  circulate. 

Various  plans  for  a  bank  currency  system  that  will  meet 
the  necessary  requirements  have  been  advanced.  Lyman  J- 
Gage  when  Secretarv  of  the  TreasurA-  suggested   that   banks 


SMITH'S  FINANCIAL  DICTIONARY.  31 

be  permitted  to  issue  circulating  notes  up  to  the  amount  of 
paid-up  capital  upon  the  deposit  of  30  per  cent  of  the  amount 
in  United  States  bonds  and  20  per  cent  in  Tnitcd  States  notes, 
leaving-  50  per  cent  as  a  charge  against  the  general  assets  of 
the  bank.  This  unsecured  portion  of  the  circulation  he  pro- 
posed should  be  further  guaranteed  by  the  estal)lishment  of  a 
fund  to  which  all  the  banks  should  contribute  through  a  semi- 
annual tax  of  1-8  of  I  per  cent  on  their  capital,  which  con- 
tributions should  be  held  on  deposit  by  the  Treasurer  of  the 
United  States  and  be  used  for  the  redemption  of  notes  of  failed 
banks. 

The  American  Bankers'  Association  in  i8<;_i-  ])roposed  a 
plan,  known  as  the  Baltimore  plan,  which  would  permit  banks 
to  issue  unsecured  notes  up  to  one-half  of  their  unimpaired 
capital,  subject  to  a  tax  of  1-2  of  i  per  cent  annually.  In 
addition  they  might  issue  "emergency  circulation"  to  the  ex- 
tent of  25  per  cent  more,  subject  to  a  heavier  tax.  A  guar- 
antee fund  of  5  per  cent  of  the  circulation  was  to  be  held  by 
the  Treasury  for  redemption  of  notes  of  failed  banks  and  the 
Treasury  was  to  have  a  first  lien  on  the  assets  of  such  banks. 

Another  plan  would  permit  the  issue  without  bond  sccurit_\' 
of  notes  to  the  amount  of  75  per  cent  of  paid-up  capital,  the 
notes  to  be  a  first  lien  on  assets.  If  the  assets  fell  short  of  the 
note  issues  deficits  were  to  be  made  good  by  a  pro-rata  assess- 
ment on  the  banks  in  the  same  state  with  the  failed  bank.  This 
plan  also  provided  for  an  "emergency  circulation"  equal  to 
two-thirds  of  the  authorized  circulation,  subject  to  an  annual 
tax  of  6  per  cent. 

John  G.  Carlisle  when  Sccretarv  of  the  Trcasur\  ])roposed 
that  banks  be  permitted  to  issue  circulation  u]i  to  75  ])er  cent 
of  the  paid-in  capital  upon  the  deposit  of  30  per  cent  of  the 
amount  of  circulation  with  the  Treasurer  of  the  United  States 
in  the  form  of  United  States  notes  and  Treasury  notes.  A 
guarantee  fund  of  5  per  cent  was  to  be  accumulated  for  the 
immediate  redemption  of  notes  of  failed  banks,  encroachments 
upon  this  fund  to  be  made  good  by  assessment,  pro-rata,  on 
the  other  banks  in  the  case  of  a  final  deficiency  in  the  assets 
of  the  failed  bank. 

It  has  also  been  suggested  that  safety  and  elasticity  might 
be  obtained  bv  delesratins:  the  authoritv  to  issue  notes  to  the 


SMl'lH-S  FINANCIAL  DICTIONARY. 


clearing  houses  of  the  large  cities  or  to  clearing  houses  to  be 
established  by  states,  thus  giving  to  the  notes  the  security  of 
the  combined  strength  of  the  banks  so  associated. 

Still  another  plan,  drawn  up  by  the  Banking  and  Currency 
committee  of  the  Fifty-seventh  Congress,  and  known  as  the 
Fowler  bill  because  it  was  introduced  by  Charles  N.  Fowler, 
chairman  of  the  committee,  provided  for  a  gradual  emission 
of  bank  notes  without  bond  security,  beginning  in  the  first 
year  with  lo  per  cent  of  the  paid-up  capital  and  increasing 
lo  per  cent  a  year  until  a  maximum  of  60  per  cent  should  be 
reached.  Permission  so  to  issue  notes  was  to  be  conditioned 
upon  the  assumption  by  the  bank  emitting  the  notes  of  the 
current  redemption  of  an  amount  of  United  States  notes  equal 
to  20  per  cent  of  its  capital.  A  tax  of  1-8  of  i  per  cent,  semi- 
annually, was  to  be  imposed  on  the  first  20  per  cent  of  notes 
taken  out  and  5-8  of  i  per  cent,  semi-annually,  on  the  suc- 
ceeding 40  per  cent.  In  addition,  after  six  years,  an  extra 
"emergency  circulation''  of  20  per  cent  might  be  taken  out. 
subject  to  a  tax  of  i  1-2  per  cent,  semi-annually,  and  after 
seven  years  still  another  20  per  cent,  subject  to  a  tax  of  2  1-2 
per  cent,  semi-annually.  The  Fowler  bill  also  provided  for 
the  creation  of  a  guarantee  fund  of  5  per  cent  for  the 
redemption  of  notes  of  failed  banks.  Other  provisions  in- 
volved concurrent  cancellation  of  a  certain  amount  of  United 
States  notes  and  provided  for  other  changes  in  the  currency 
and  banking  laws,  but  the  foregoing  s3mopsis  covers  the  main 
features  as  far  as  asset  currency  is  concerned. 

Canadian  bank  notes,  and  also  the  old  New  England  bank 
currency  vxdiich  was  redeemed  through  tlie  operation  of  the 
Suiifolk  Bank  system,  are  pointed  to  as  illustrations  of  the 
safety  and  elasticity  of  a  properly  conducted  asset  currency 
system. 

Assets.  The  entire  property  of  a  person,  corporation  or 
estate.  For  instance,  the  assets  of  an  individual  comprise  all 
the  property  that  he  owns  which  is  applicable  to  the  payment 
of  his  debts,  as  "His  assets  exceed  his  liabilities." 

Property  that  is  mortgaged  or  is  otherwise  encumbered  is 
coimted  as  an  asset,  but  the  debt  that  it  secures  must  first  be 
paid  out  of  the  proceeds  of  it,  so  that  only  the  equity  in  it  is 
available  to  apply  in  the  liquidation  or  pavmcnt  of  misecured 


SMITH'S  FINANCIAL  DICTIONARY.  33 


debts  or  claims.  The  equity  is  the  difference  between  the 
value  of  the  property  and  the  amount  of  the  obligation  (debt) 
to  secure  the  payment  of  which  the  property  is  pledged. 

Assign.  To  transfer  in  writing  the  ownership  or  control 
of  property,  rights  or  interests ;  to  make  an  assignment. 

Also,  an  assign  is  one  to  whom  property,  rights  or  interests 
have  been  transferred  or  made  over. 

Assigned  in  blank.  The  common  term  is  signed  in  blank; 
a  formal  assignment  of  a  stock  or  bond  or  of  other  property 
in  which  the  space  for  the  name  of  the  new  owner  is  left  blank. 

A  stock  certificate  or  a  registered  bond  assigned  in  blank 
should  not  be  received  from  a  stranger  without  proper  identi- 
fication and  satisfactory  evidence  of  the  genuineness  of  the 
assignment  and  attestation. 

The  English  term  which  is  equivalent  to  assigned  in  blank 
is  transferred  in  blank. 

Assigned  stocks  or  bonds.  Stocks  or  registered  bonds  as- 
signed for  transfer.  The  securities  may  be  assigned  in  blank 
or  specifically  to  an  individual. 

Assignee.  The  one  to  whom  property,  rights  or  interests 
have  been  assigned  either  for  himself  or  in  trust ;  a  trustee. 

Assignment.  The  act  of  assigning  or  transferring  or  of 
allotting  or  awarding. 

Also,  an  assignment  is  the  instrument  in  writing  by  which 
property,  rights  or  interests  are  transferred. 

Assignment  for  the  benefit  of  creditors.  The  act  by  which 
an  insolvent  transfers  his  property  to  a  trustee  (assignee)  who 
is  empowered  to  manage  and  sell  the  same  and  to  pay  the 
proceeds  to  his  creditors. 

Assimilated.  For  the  application  of  this  word  in  dealings  in 
stocks  and  bonds  see  Absorbed. 

Associated  banks  (of  New  York).  The  banks  in  New  York 
that  are  associated  in  making  daily  exchanges  or  clearings  at 
the  clearing  house;  in  other  words,  the  banks  that  belong  to 
the  clearing  house ;  or,  in  still  other  words,  the  banks  that  are 
members  of  the  Clearing  House  Association. 

For  an  explanation  of  the  method  employed  in  making  clear- 
ings see  Clearing  house  of  the  associated  banks  of  New  York. 

"A"  stock.  This  is  the  English  designation  for  deferred 
ordinary  (common)  stock.     When  for  dividend  purposes  the 


24  SMITH'S  FINANCIAL  DICTIONARY. 

ordinary  stock  of  a  company  has  been  divided  into  two  parts 
called  preferred  or  "B"  stock  and  deferred  or  "A"  stock  the 
dividend  on  the  A  stock  is  deferred  until  a  fixed  amount  has 
been  paid  on  the  B  stock. 

This  B  or  preferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called  pre- 
ferred stock  is  in  Great  Britain  called  preference  stock  and 
preference  stock  in  Great  Britain  may  be  divided  into  two  or 
more  classes  called  first  preference,  second  preference,  etc.,  just 
as  preferred  stock  in  the  United  States  may  be  divided  into 
two  or  more  classes  called  first  preferred,  second  preferred,  etc. 
When,  however,  there  is  but  one  class  of  preference  stock 
ahead  of  an  ordinary  stock  in  Great  Britain  the  B  or  preferred 
stock  is  equivalent  to  second  preferred  stock  in  the  United 
States. 

The  term  A  stock  is  also  occasionally  used  merely  as  a  dis- 
tinction and  not  with  the  connotation  of  "deferred."  For 
instance,  it  is  sometimes,  though  rarely,  used  to  distinguish 
one  issue  of  a  company's  or  government's  debt  from  another. 
Costa  Rica  A  bonds  and  Mexican  National  Railroad  A  bonds 
are  examples  of  this  use. 

At  a  discount.     At  less  than  the  face  value ;  below  par. 

A  stock  or  bond  is  at  a  discount  when  it  is  selling  below  its 
par  (face)  value.     For  additional  information  see  Par. 

At  a  premium.     Above  the  face  value ;  above  par. 

A  stock  or  bond  is  at  a  premium  when  it  is  selling  above 
its  par  (face)  value.     For  additional  information  see  Par. 

At  call.  The  English  term  which  means  the  same  as  the 
American  term  on  call.  Money  at  call  (on  call)  is  money 
loaned  the  return  of  which  may  be  demanded  by  the  lender  at 
any  time. 

Also,  at  call  is  an  English  term  for  money  deposited  with  a 
bank  or  banker  which  may  be  withdrawn  at  any  time.  A 
lower  rate  of  interest  is  allowed  on  money  at  call  than  on 
money  at  notice  (money,  notice  of  the  intention  to  withdraw 
which  must  be  given). 

At  even.  On  the  London  Stock  Exchange  at  even  means 
that  both  bull  (buyer)  and  bear  (seller)  are  able  to  continue 
to  the  next  settlement  a  bargain  (contract)  in  a  stock  so 
quoted  without  charge  for  the  accommodation. 


:>MriHS  I'lNANCIAL  DlCTlUNARY.  35 

Examples ;  Even  to  1-16  contango  means  that  the  bull  pays 
i-iO  per  cent  while  the  bear  carries  over  even.  1-16  back 
(backwardation)  to  even  means  that  the  bull  carries  over  even 
while  the  bear  has  to  pay  1-16  per  cent. 

Atlantic  ports.  When  this  term  is  used  with  reference  to 
export  trade  it  means  the  four  principal  ports  on  the  Atlantic 
coast — Boston,  New   York,  Philadelphia  and  Baltimore. 

At  notice.  English  term  for  money  deposited  with  a  bank 
or  banker  at  interest  which  may  be  withdrawn  only  at  (on) 
notice.  A  higher  rate  of  interest  is  allQwed  on  money  at 
notice  than  on  money  at  call  (money  which  may  be  withdrawn 
at  any  time). 

At,  or  better.  It  is  a  frequent  practise  to  give  an  order  to 
buy  a  stock  at,  say,  100,  or  better,  meaning  a  lower  figure ;  or 
to  sell  at,  say,  100,  or  better,  meaning  a  higher  figure. 

At  par.  At  the  face  value.  For  additional  information 
see  Par. 

Attachment.  A  writ  authorizing  the  seizure  by  the  sheriff 
of  property  belonging  to  the  defendant  in  an  action  at  law  and 
to  hold  it  to  satisfy  any  judgment  that  the  plaintiff  may 
recover. 

An  attachment  is  a  provisional  remedy.  It  is  the  exercise 
of  judicial  power  to  save  a  vigilant  creditor  from  loss  by  tak- 
ing possession  of  property  of  the  debtor  and  holding  it  to 
satisfy  any  judgment  that  may  afterwards  be  obtained.  It  is 
usual  to  require  from  the  creditor  a  bond  in  double  the  amount 
of  the  claim  for  the  payment  of  any  loss  or  damage  sustained 
by  the  debtor  should  the  attachment  subsequently  be  vacated 
as  illegal  or  improperly  granted.  The  grounds  ordinarily 
upon  which  an  attachment  are  issued  are  non-residence,  fraud 
or  deceit  in  obtaining  credit,  or  actual  or  contemplated  re- 
moval of  the  person  or  property  of  the  debtor  from  the  juris- 
diction of  the  court. 

Attestation,  The  writing  by  a  person  of  his  name  on  an 
instrument  to  signify  that  it  was  executed  in  his  presence  or 
that  it  is  correct. 

At  the  market.  Buying  or  selling  (as  stocks)  at  current 
prices  instead  of  at  specified  prices. 

At  the  opening.  Buying  or  selling  (as  stocks)  at  opening 
price? — at  prices  prevailing  at  the   opening  or  beginning  of 


36  SMITH'S  FINANCIAL  DICTIONARY. 

business.  Or,  buying  or  selling"  at  the  opening  of  a  company's 
transfer  books  after  they  have  been  closed  for  an  election  or 
for  the  payment  of  a  dividend  or  for  some  other  purpose. 

Sometimes  a  broker  receives  an  order  to  sell  a  stock  at 
the  opening  of  the  books,  meaning  at  (on)  the  opening 
of  the  books  of  the  company  which  issued  it.  The  delay 
in  the  sale  until  that  time  may  be  because  the  stock  has  been 
assigned  to  a  specified  individual  by  the  original  owner  instead 
of  having  been  assigned  (or  signed)  in  blank  (see  Assigned  in 
blank)  and  therefore  not  being  a  delivery  it  is  necessary  to 
wait  until  a  new  certificate  can  be  obtained  before  a  sale  can 
be  consummated. 

In  the  same  way  an  order  may  be  given  to  a  broker  to  buy 
at  the  opening  (of  the  books)  because  stock  is  unobtainable  or 
obtainable  with  difficulty  until  that  time  or  because  the  intend- 
ing buyer  believes  he  can  purchase  to  better  advantage  at  the 
opening  of  the  books  than  before. 

At  three  or  at  ten,  twenty,  thirty  or  sixty,  etc.  Bought  or 
sold  (as  stocks)  for  delivery  absolutely  at  the  end  of  the  num- 
ber of  days  specified  without  an  option  for  an  earlier  delivery. 

Attorney.  An  attorney  (that  is,  a  private  attorney  or  attor- 
ney in  fact)  is  a  person  empowered  by  another  to  act  in  his 
stead,  especially  a  person  who  is  legally  appointed  and  form- 
ally authorized  to  transact  business  for  another. 

The  distinction  between  a  private  attorney  or  attorney  in 
fact  and  a  public  attorney  or  attorney  at  law  is  that  the  latter 
is  qualified  to  prosecute  and  defend  actions  in  a  court  of  law, 
whereas  the  former  is  restricted  to  business  out  of  court. 

Also  see  Power  of  attorney. 

At  value.  This  is  a  term  used  in  commercial  dealings  and 
particularly  in  transactions  in  dry  goods.  If  a  sale  of  goods 
for  delivery  in  the  next  or  an  ensuing  season  is  made  at  value 
instead  of  at  a  designated  price  it  means  that  the  price  has 
not  yet  been  fixed  for  the  season  in  question  and  that  the 
goods  will  be  billed  at  the  price  ruling  when  shipment  is  made. 

Also,  goods  sold  for  the  current  season,  but  the  prices  of 
which  are  subject  to  change,  often  are  sold  at  value,  which 
means  that  they  will  be  billed  at  the  price  ruling  when  ship- 
ment is  made. 

Audit.     An    examination    and    adjustment    of   accounts    by 


SMITHS  FINANCIAL  DICTIONARY. i7 

comparing  the  charges  with  the  vouchers,  striking  balances, 
etc. 

The  purpose  of  an  audit  is  to  determine  or  demonstrate  the 
correctness  of  accounts.  An  independent  audit  of  the  ac- 
counts of  a  company  (as  a  railroad  company)  insures  (or  is 
intended  to  insure)  to  the  stockholders  and  the  general  public 
the  accuracy  of  the  financial  exhibits  issued  by  the  officers  of 
the  company. 

There  are  concerns  which  make  a  business  of  auditing  ac- 
counts and  which  furnish  a  certificate  and  guaranty  of  the 
accuracy  of  their  audits. 

Authorized  clerk.  One  who  is  authorized  by  the  committee 
for  general  purposes  of  the  London  Stock  Exchange  to  trans- 
act business  on  the  exchange  for  the  member  by  whom  he  is 
employed.  An  unauthorized  clerk,  although  admitted  to  the 
exchange,  is  an  attendant  only ;  his  presence  is  for  the  purpose 
of  checking  (making  and  comparing  memoranda  of)  bargains 
(contracts)  and  for  the  purpose  of  "passing  names"  on  the 
third  day  of  the  settlement.    See  Name  day. 

Automatic  currency.  Another  name  for  elastic  currency ; 
see  Elastic  currency. 

Available  assets.  Assets  free  to  be  converted  into  cash  or 
to  be  otherwise  employed ;  that  are  not  pledged  or  covered  by 
lien. 

Aval,  The  written  guarantee  by  a  third  person  of  the 
payment  of  a  bill  of  exchange  wdien  due ;  guaranty ;  indorse- 
ment.' 

Average  book.  In  a  book  bearing  this  name  in  a  bank  is 
kept  a  record  of  the  average  credit  balances  of  depositors. 
The  book  is  intended  to  serve  as  a  guide  in  making  loans  and 
in  discounting  paper  for  customers  of  the  bank  who  ask  ac- 
commodation from  it. 

Averaging.  A  speculative  term ;  increasing  purchases  or 
sales,  as  of  stocks,  when  the  market  is  pursuing  an  adverse 
course,  for  the  purpose  of  improving  the  position  of  the  buyer 
or  seller  in  the  matter  of  price. 

Illustration :  One  hundred  shares  of  stock  are  purchased  at 
100  and  the  price  declines  to  98.  At  the  last  named  figure  100 
shares  more  are  purchased,  which  makes  the  average  price  for 
the  200  shares  99.  Then,  if  a  recovery  to  99  takes  place  the 
operator  is  even  ;  if  it  extends  to  100  he  has  a  profit. 


389149 


S8  SMITH'S  FINANCIAL  DICTIONARY. 


Again,  lOO  shares  of  stock  are  sold  short  at  lOO  and  the 
price  advances  to  102.  At  the  last-named  figure  100  shares 
more  are  sold,  which  makes  the  average  price  for  the  200 
shares  101.  Then  if  a  reaction  to  loi  takes  place  the  operator 
is  even ;  if  the  reaction  extends  to  100  he  has  a  profit. 

Averaging  out.  A  speculative  term,  meaning  to  conclude  a 
trade  or  venture,  as  in  stocks,  without  loss  and  perhaps  with 
a  profit  by  the  process  of  averaging;  see  Averaging. 

Award.  To  assign  or  allot,  as  to  award  stock  to  a  member 
of  an  underwriting  syndicate. 

Also,  an  award  is  the  decision  given  by  an  arbitrator  in  a 
matter  (as  a  business  transaction)  which  was  referred  to  him 
for  settlement. 


B 

B.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  bonds  or  class  B  or  (when  accompanied  by  figures)  bid 
or  buyer. 

A  bid  alone  (without  an  offer)  is  followed  by  the  letter  B, 
thus :  RG.  75.  B,  meaning  that  75  was  bid  for  Reading  stock.  A 
bid  and  offer  are  separated  by  @,  thus:  75(0)1-2,  meaning  that 
75  was  bid  for  the  stock  and  that  is  was  offered  at  75  1-2.  (On 
some  tickers  three  dots  .  .  .  are  used  in  place  of  @).  A  trans- 
action buyer  4,  10,  20,  30  or  60  is  recorded  (printed)  thus: 
RG.  75.  B4.  (or  ID,  etc.),  meaning  that  Reading  stock  sold  at 
75  and  that  the  buyer  may  on  one  day's  notice  to  the  seller 
call  for  the  delivery  of  it  at  any  time  within  4  days  (or  10 
days,  etc.)  ;  see  Buyer's  option. 

Back.     Abbreviation  of  backwardation ;  see  Backwardation. 

Backing.  As  applied  to  a  bill  of  exchange  or  a  promissory 
note  backing  means  indorsement ;  see  Indorsement. 

Back  spread.  A  term  used  in  an  arbitrage  operation  in  a 
commodity  (grain,  cotton  or  coffee,  etc.)  and  also  in  a  stock 


SMITH'S  FINANCIAL  DICTIONARY.         .  39 

when  different  prices  prevail  normally  as  well  as  from  fluctua- 
tions for  the  same  thing  in  dift'erent  markets. 

The  thing  is  bought  in  one  market  and  simultaneously  sold 
in  another,  to  be  subsequently  sold  where  is  was  bought  and 
simultaneously  bought  where  it  was  sold. 

In  grain  there  is  normally  a  difference  in  price  between  two 
markets  equal  to  the  cost  of  transporting  the  grain  from  the 
market  where  the  lower  price  prevails  to  the  market  where  the 
higher  price  prevails.  To  permit  a  back  spread  the  difference 
in  price  between  the  two  markets  must  be  less  than  the  normal 
difference. 

As  an  example  of  a  back  spread  grain  may  be  sold  in  Chi- 
cago and  bought  in  New  York  if  the  price  in  New  York  is  not 
sufficiently  above  the  price  in  Chicago  to  equal  the  cost  of 
transportation  of  the  grain  from  New  York  to  Chicago. 

The  normal  difference  between  Chicago  and  New  York  in 
the  price  of  wheat  is,  say,  6  cents  a  bushel — that  is,  wheat  is 
normally  6  cents  a  bushel  lower  in  price  in  Chicago  than  in 
New  York.  Say  a  difference  of  4,cents,  or  2  cents  less  than 
the  normal  difference,  is  found  to  exist.  The  speculator  buys 
in  New  York  and  sells  in  Chicago.  If  the  Chicago  price  re- 
mains stationary  while  the  New  York  price  advances  2  cents 
the  speculator  sells  in  New  York  and  makes  2  cents  a  bushel 
on  the  transaction  there,  while  he  sells  in  Chicago  and  neither 
gains  nor  loses  on  the  transaction  there.  Or,  if  the  Chicago 
price  drops  i  cent  and  the  New  York  price  advances'  i  cent  he 
buys  in  Chicago  and  makes  i  cent  a  bushel  on  the  transaction 
there  and  he  sells  in  New  York  and  makes  i  cent  a  bushel  on 
the  transaction  there. 

A  back  spread  is  distinguished  from  a  spread  from  the  fact 
that  in  a  back  spread  the  difference  in  price  between  the  two 
markets  is  less  than  the  normal  difference,  whereas  in  a 
spread  the  difference  in  price  between  the  two  markets  is 
greater  than  the  normal  difference ;  see  Spread. 

A  back  spread  between  Liverpool  and  New  York  "or  be- 
tw^een  Liverpool  and  Chicago  or  between  any  market  in  one 
country  and  any  market  in  any  other  country  is  effected  in  the 
same  manner  as  a  back  spread  between  Chicago  and  New  York. 

Likewise,  a  spread  in  cotton,  coffee  or  any  other  commodity 
is  effected  in  the  same  manner  as  in  grain. 


40  SMITH'S  FINANCIAL  DICTIONARY. 


For  information  as  to  a  back  spread  in  an  arbitrage  opera- 
tion in  a  stock  see  Arbitrage. 

Backwardation.  London  Stock  Exchange  term,  meaning  the 
premium  charged  the  seller  when  the  bear  seller  (seller  short) 
continues  his  bargain  (contract)  to  the  next  fortnightly  settle- 
ment. A  backwardation  is  only  charged  on  stocks  that  are 
oversold  and  are  scarce  for  delivery.  Generally  the  seller  who 
continues  receives  a  contango.  The  word  backwardation  is 
often  abbreviated  to  back. 

Examples:  i-8  to  1-4  back  means  that  the  bear  (who  is 
short)  pays  to  the  jobber  1-4  per  cent  for  the  accommodation 
and  the  bull  (who  is  long)  receives  from  the  jobber  1-8  per 
cent.  1-8  back  to  1-8  contango  means  that  the  bear  pays  1-8 
per  cent  and  the  bull  pays  1-8  per  cent.  1-16  back  to  even 
means  that  the  bear  pays  1-16  per  cent  and  the  bull  carries 
over  at  even,  or  in  other  words,  pays  nothing. 

Also,  there  is  said  to  be  backwardation  in  a  security  when  it 
can  be  bought  cheaper  for  the  account  (see  For  the  account) 
than  for  money  (see  For  cash)  ;  that  is,  it  can  be  obtained  at  a 
lower  price  when  the  payment  is  to  be  made  at  the  next  settle- 
ment than  if  immediate  cash  payment  is  to  be  made. 

Bad  debt.  A  debt  on  which  interest  is  due  and  unpaid  for 
six  months,  unless  well  secured  and  in  process  of  collection,  is 
a  bad  debt  as  defined  by  the  National  bank  act. 

Bag.  The  jute  bag  in  which  cofifee  is  imported  contains 
about  200  pounds  of  Rio  or  133  pounds  of  Java. 

Balance.  The  amount  required  to  equalize  the  debtor  and 
creditor  sides  of  an  account. 

For  information  as  to  buying  and  selling  on  balance  in  arbi- 
trage operations  in  stocks  see  On  balance. 

Balance  due.  The  unpaid  difiference  between  debts  and 
credits  in  an  account ;  the  amount  owed  by  the  debtor  to  the 
creditor  after  the  total  of  credits  has  been  deducted  from  the 
total  of  debits. 

Balance  of  trade.  The  difiference  in  money  value  between 
sales  and  purchases;  in  foreign  trade  the  difference  in  money 
value  between  exports  and  imports. 

As  commonly  used  the  term  balance  of  trade  signifies  the 
balance  or  difference  in  favor  of  a  country,  for  instance,  the 
United  States  as  asfainst  the  rest  of  the  world;  or  in  favor  of 


•     SMITH'S  FINANCIAL  DICTIONARY.  41 

the  rest  of  the  world  and  against  that  country.  To  be  exact 
the  term  balance  of  international  trade  should  be  employed, 
although  it  seldom  is. 

Balances.     See  Clearing  house  balances ;  also  see  Balance. 

Balance  sheet.  A  statement  in  tabular  form  showing  assets 
and  liabilities,  profit  and  loss. 

Balancing  books.  The  periodical  closing  and  adjustment 
of  accounts  in  a  ledger  for  the  purpose  of  ascertaining  profits 
or  losses. 

Bale.  A  bale  of  cotton  contains,  as  nearly  as  may  be,  500 
pounds ;  a  bale  of  hops  contains,  as  nearly  as  may  be,  180 
pounds. 

Ballooning.  A  stock  market  colloquialism,  meaning  to  work 
a  stock  up  far  beyond  its  actual  worth. 

Baltic  ports.  Baltic  Sea  ports  from  which  most  of  the  Rus- 
sian wheat  was  formerly  exported.  Russian  wheat  is  now 
almost  entirely  shipped  from  Black  Sea  ports. 

Baltimore  plan.  The  name  applied  to  a  plan  presented  at 
and  approved  by  the  convention  of  the  American  Bankers* 
Association  in  Baltimore  in  1894,  wherein  it  was  proposed  to 
repeal  the  requirement  in  the  National  bank  act  for  the  deposit 
of  government  bonds  in  the  Treasury  to  secure  circulation 
(national  bank  notes)  ;  to  allow  banks  to  issue  notes  to  the 
extent  of  one-half  their  paid-up  and  unimpaired  capital,  these 
notes  to  be  subject  to  an  annual  tax  of  1-2  of  i  per  cent;  and 
to  allow  banks  to  issue  "emergency  circulation"  to  the  extent 
of  25  per  cent  additional,  the  additional  circulation  to  be  sub- 
ject to  a  heavier  tax.  A  guarantee  fund  of  5  per  cent  was  to 
be  established  by  the  banks  to  be  held  by  the  Treasury  for 
the  redemption  of  notes,  and  circulation  was  to  be  a  first  lien 
upon  the  assets  and  upon  the  liability  of  stockholders  of  banks, 
which  liability  is  for  an  amount  equal  to  and  in  addition  to  the 
par  value  of  the  stock  owned  by  stockholders. 

Banging  the  market.  London  Stock  Exchange  term  for 
forcing  down  the  market  by  heavy  sales. 

Bank.  A  bank  is  an  institution  for  lending,  borrowing,  is- 
suing or  caring  for  money.  It  may  be  either  incorporated  or 
private.  The  New  York  State  law  thus  defines  bank :  "Any 
moneyed  corporation  authorized  by  law  to  issue  bills,  or  notes, 
or  other  evidences  of  debt  for  circulation  as  money,  or  to 


42  SMITH'S  FINANCIAL  DICTIONARY. 


receive  deposits  of  money,  and  commercial  paper,  and  to  make 
loans  thereon;  and  to  discount  bills,  notes,  or  other  commer- 
cial paper,  and  to  buy  and  sell  gold  and  silver  bullion  or  for- 
eign coins,  or  bills  of  exchange." 

There  are  five  kinds  of  banks  in  the  United  States — national 
bank,  state  bank,  trust  company,  savings  bank,  individual 
banker  (or  private  bank). 

The  National  bank  act  provides  for  the  incorporation  of  na- 
tional banks.  This  act  permits  such  banks  to  include  as 
part  of  their  title  the  word  "national"  and  prohibits  all  other 
banks  from  using  the  v^ord  "national"  as  part  of  their  name. 
In  the  District  of  Columbia  savings  banks  necessarily  exist 
under  authorization  of  the  National  bank  act.  State  banks  are 
organized  under  the  laws  of  the  states  in  which  they  are  situ- 
ated. Trust  companies  and  savings  banks  are  also  organized 
under  state  laws.  Private  banks  or  bankers  (that  is,  one  or 
more  persons  engaged  in  the  business  of  banking  but  not  in- 
corporated as  a  company)  are  not  subject  to  supervision  by 
national  or  state  authorities  except  when  they  issue  circula- 
ting notes  (which  they  are  permitted  to  do  under  the  laws  of 
New  York  state  on  the  same  conditions  imposed  on  state 
banks,  but  which  they  have  found  unprofitable  on  account  of 
the  Federal  tax  of  lo  per  cent  on  all  note  issues  but  those  of 
national  banks). 

When  a  person  keeps  an  account  with  a  bank  he  is  said  to 
bank  at  that  bank. 

Bankable  bill.  The  term  usually  employed  is  bank  bill ;  see 
Bank  bill. 

Bankable  paper.  The  term  usually  employed  is  bank  paper ; 
see  Bank  paper. 

Bank  account.  An  account  kept  with  a  bank  which  may  be 
drawn  against  until  the  credit  balance  is  exhausted. 

Bank  act.  The  name  given  to  the  special  act  under  which 
the  Bank  of  England  exists.  The  earlier  charters  of  the  bank 
were  for  terminable  periods ;  the  present  charter,  conferred  by 
the  Bank  act,  so-called,  in  1844,  continues  for  an  indefinite 
period. 

The  Bank  act  limits  the  circulation  (notes)  that  may  be 
issued  by  the  Bank  of  England  against  (or  be  backed  by) 
securities  alone.     In  times  of  crisis  when  the  scarcity  of  cir- 


SMirH'S  FINANCIAL  DICTIONARY.  43 


dilating  medium  causes  panic  the  bank  is  allowed  by  Parlia- 
ment to  increase  the  amount  of  the  notes  that  it  may  issue 
against  securities.  This  is  done  by  suspension  of  the  Bank 
act.  The  suspension  is  permitted  by  a  "Letter  of  license" 
from  the  government  of  the  day,  which  promises  that  the  gov- 
ernment will  propose  a  bill  of  indemnity  if  the  legal  limit  is  ex- 
ceeded.    The  Bank  act  was  last  suspended  in  1866. 

For  the  provisions  of  the  act  under  which  the  national  banks 
in  the  United  States  are  created  and  operate  see  National  bank 
act. 

Bank  balance.  This  term  may  be  applied  either  to  the  bal- 
ance against  or  in  favor  of  a  bank  at  the  clearing  house  or  to 
the  balance  standing  to  the  credit  of  an  individual,  firm  or 
corporation  in  a  bank. 

Bank  bill.  This  term  is  an  abbreviation  of  bankable  bill; 
it  means  a  bill  of  exchange  or  draft  that  is  of  such  good  quality 
that  a  bank  will  readily  discount  (buy)  it.  Accordingly,  it 
also  applies  to  a  bill  when  it  bears  the  indorsement  of  a  bank. 
The  usual  manner  in  which  a  bank  becomes  an  indorser  of  a 
bill  is  in  selling  a  bill  which  it  holds  instead  of  retaining  it 
until  maturity.  The  reason  for  selling  is  that  the  bank  desires 
cash  or  that  it  can  make  a  satisfactory  profit  by  disposing  of  it. 
The  bill  brings  a  better  price  (the  discount  is  less)  with  the 
bank's  indorsement  than  it  would  bring  without  the  bank's 
indorsement. 

The  term  bank  bill  or  bank's  bill  also  applies  to  a  bill  of  ex- 
change or  draft  issued  by  a  bank  and  payable  by  a  corre- 
spondent of  the  bank. 

The  term  bank  bill  also  is  often  used  in  place  of  bank  note 
(money). 

Bank  book.  The  book  held  by  a  depositor  in  a  bank  in 
which  are  entered  the  sums  placed  to  his  credit  and.  when  a 
balance  is  struck  at  intervals,  the  amount  of  the  debits. 

Bank  check.  A  written  order  for  the  payment  of  money  on 
deposit  in  a  bank,  usually  executed  by  filling  in  and  signing  a 
printed  or  engraved  blank  form  prepared  for  the  purpose.  For 
additional  information  see  Check. 

Bank  clearings.  Same  as  bank  exchanges :  the  items 
(checks,  drafts,  etc.)  presented  by  banks  at  the  clearing  house 
for  collection.     It  is  not  correct  to  sav  bank  clearances :  clear- 


44  SMITH'S  FINANCIAL  DICTIONARY. 

iiigs  is  the  word  that  should  be  employed.  For  additional  in- 
formation see  Clearing  house  of  the  associated  banks  of  New 
York. 

Bank  credit.  A  credit  with  a  bank,  usually  established  by 
depositing  security,  on  which  money  may  be  drawn  by  check 
up  to  an  agreed  amount. 

Bank  director.  A  director  of  a  national  bank  or  of  a  state 
bank.  The  title  of  the  corresponding  officer  of  a  savings  bank 
is  trustee.  It  is  a  common  practise  to  speak  of  a  director  of 
a  trust  company  as  a  bank  director. 

The  directors  of  a  bank,  like  other  agents,  are  bound  to  use 
reasonable  care  and  diligence  in  protecting  the  interests  con- 
fided to  them.  For  a  loss  which  is  suffered  despite  such  care 
they  are  not  liable;  but  for  any  loss  caused  by  negligence  they 
are  liable.     Also  see  Director. 

Bank  draft.  A  draft  or  bill  of  exchange  issued  by  a  bank 
and  payable  by  another  bank. 

Banked.  Sometimes  when  money  (or  its  equivalent,  as 
checks  and  drafts)  has  been  deposited  in  bank  it  is  said  to  have 
been  banked. 

Banker.  A  banker  has  been  defined  as  a  person  who  takes 
care  of  other  people's  money  and  lets  them  have  it  when  they 
want  it.  The  distinct  function  of  the  banker  begins  when  he 
uses  the  money  of  others  ;  as  long  as  he  uses  his  own  money  he 
is  a  capitalist. 

The  term  banker  is  greatly  misused.  Stock  brokers,  dealers 
in  exchange  and  commercial  paper,  note  shavers,  money  lend- 
ers and  money  changers  often  describe  themselves  as  bankers. 
As  a  fact  they  are  not  bankers.  Syndicate  managers  also  often 
describe  themselves  as  bankers ;  they  are  financiers  perhaps, 
but  not  bankers. 

Banker's  bill.  A  bill  or  exchange  or  draft  drawn  and  sold 
by  a  banker  and  payable  by  another  banker. 

Banker's  draft.  A  draft  or  bill  of  exchange  issued  by  a 
banker  and  payable  by  another  banker. 

Banker's  exchange.  Exchange  (draft)  on  a  banker;  that  is, 
exchange  sold  by  one  hanker  and  payable  by  another  banker. 

Banker's  note.  A  promissory  note  issued  by  a  private 
banker  for  circulation  as  a  substitute  for  money. 

Bank  examiner.     A  bank  examiner  in  New  York  state  is  ap- 


SMITH'S  FINANCIAL  DICTIONARY.  43 

pointed  by  the  Superintendent  of  the  Banking  Department, 
who  has  practically  the  same  power  over  state  banks  that  the 
Comptroller  of  the  Currency  has  over  national  banks.  The 
law  says  that  an  examiner  shall  "examine  fully  into  the  books, 
papers,  and  affairs  of  the  corporation,  or  individual  banker 
specified  in  his  appointment,  and  report  on  oath  to  the  super- 
intendent the  result  of  such  examination.  No  such  examiner 
shall  be  appointed  receiver  of  any  corporation  or  individual 
banker  whose  affairs  he  shall  have  examined  pursuant  to  such 
appointment." 

Also  see  National  bank  examiner. 

Bank  exchange.  Exchange  (bills  of  exchange — drafts)  is- 
sued and  sold  by  a  bank  and  payable  by  another  bank. 

Bank  exchanges.  Same  as  bank  clearings ;  the  items 
(checks,  drafts,  etc.)  presented  at  the  clearing  house  for  col- 
lection. 

For  additional  information  see  Clearing  house  of  the  asso- 
ciated banks  of  New  York. 

Bank  holiday.  A  secular  day  on  which  banks  in  Great  Brit- 
ain and  Ireland  are  legally  closed. 

In  Great  Britain  (excepting  Scotland)  and  Ireland  the  legal 
or  bank  holidays  are  Easter  Monday,  Whit-Monday,  the  first 
Monday  in  August,  and  December  26  (Boxing  day)  ;  and 
the  banks  are  also  closed  as  a  matter  of  course  on  Christmas 
day  and  Good  Friday.  In  Scotland  the  bank  holidays  are  New 
Year's  day,  Christmas  (if  either  falls  on  a  Sunday,  then  the  fol- 
lowing day  is  a  holiday),  Good  Friday  and  the  first  Mondays 
in  May  and  August. 

Banking.  Banking  is  a  business  which  seems  to  be  as  old 
as  civilization.  Money  lenders  and  the  payment  of  usury  are 
mentioned  in  the  Bible  and  in  other  ancient  literature,  but 
banking  in  its  modern  acceptation  is  by  many  believed  to  be  an 
evolution  that  has  been  the  natural  outgrowth  of  industrial 
development  and  the  establishment  of  civic  order. 

Not  many  centuries  ago  each  man  was  in  a  large  degree  his 
own  defender  and  protector.  To  narrow  the  illustration  to 
London,  for  instance:  To  travel  in  safety  in  the  streets  of  that 
city  after  nightfall  it  was  necessary  to  go  armed  and  in  com- 
pany. The  carrying  of  valuables  was  an  extra  invitation  to 
attack.     Goldsmiths,  who  of  necessity  had  to  keep  on  hand 


46  SMITH'S  FINANCIAL  DICTIONARY. 

large  stocks  of  the  precious  metals,  took  special  precautions 
for  the  safe  keeping  of  their  property  and  people  acquired  the 
habit  of  depositing  money  with  them,  paying  for  the  privilege 
in  order  to  secure  the  increased  protection. 

Gradually  the  goldsmiths  learned  that  all  the  people  who 
had  so  deposited  money  did  not  call  for  it  at  once  and 
they  began  to  lend  out  the  surplus  on  their  own  authority. 
They  found  also  that  if  a  man  wanted  to  discharge  a  debt  he 
found  it  more  convenient  to  give  his  creditor  an  order  for  the 
money  on  deposit  than  to  come  in  person  and  carry  away  the 
gold,  imposing  upon  the  creditor  the  necessity  of  returning  the 
gold  for  deposit  in  his  name. 

Thus,  the  system  of  a  transfer  of  credits  by  means  of  checks 
grew  up.  It  was  not  only  safer,  but  more  convenient.  In 
making  loans,  likewise,  the  goldsmith,  now  become  a  banker, 
learned  merely  to  put  the  loan  on  his  books  as  a  credit  to  the 
borrower,  against  which  the  latter  could  draw  his  order  or 
check  precisely  as  if  he  had  deposited  the  actual  money ;  or 
the  goldsmith  gave  his  own  note  or  promise  to  pay  to  the 
borrower.  The  latter  passed  it  on  and  it  became  a  circulating 
medium  wherever  the  credit  of  the  goldsmith  was  good. 

Modern  banking  is  simply  a  development  of  this  system. 
The  function  of  a  modern  bank  is  to  accept  for  safe  keeping 
and  make  legitimate  use  of  the  money  of  its  customers.  This 
money  and  its  own  paid-in  capital  it  makes  the  basis  of  loans, 
on  which  it  charges  interest  in  accordance  with  the  laws  under 
which  it  is  chartered.  These  loans  may  take  the  form  of  actual 
money,  but  as  a  rule  they  are  merely  credits  against  which  the 
borrower  is  privileged  to  draw.  They  are  entered  on  the 
books  of  the  banks  as  "deposits."  In  practise  these  "loans" 
and  "deposits"  have  been  found  so  nearly  to  counterbalance 
each  other  that  only  a  small  percentage  of  actual  money  is 
required  to  transact  the  larger  affairs  of  business. 

In  retail  transactions,  for  the  payment  of  employees,  and  in 
small  daily  affairs  of  life  actual  money  is.  used,  but  for  all  other 
business  the  transfer  of  credits  by  means  of  bank  checks  and 
bills  of  exchange  is  the  universal  rule.  In  other  words,  banks 
have  become  the  principal  mechanism  of  exchange.  To  what 
an  extent  bank  checks  have  supplemented  actual  money  as  a 
medium  of  exchange,  thus  making  possible  the  wonderful  busi- 


SMITH'S  FINANCIAL  DICTIONARY.  47 

ness  activity  of  the  present  day,  can  best  be  judged  by  study- 
ing the  figures  of  the  operations  of  the  various  clearing  houses 
and  the  relation  which  the  actual  money  in  the  vaults  of  the 
banks  bears  to  the  total  transactions  recorded. 

in  addition  to  acting  as  depositories  for  money  and  nego- 
tiators of  credits  many  banks  exercise  the  function  of  note 
issuing.  Under  the  national  banking  law  any  national  bank 
may  issue  notes  up  to  the  amount  of  its  paid-in  capital  upon 
depositing  with  the  Treasurer  of  the  United  States  authorized 
bonds  of  the  United  States  equal  in  par  value  to  the  amount 
of  circulating  notes  so  issued.  State  banks  are  also  authorized 
to  issue  notes,  but  the  Federal  tax  of  10  per  cent  on  state  bank 
circulation  acts  as  an  effective  prohibition  on  the  exercise  of 
the  right. 

Various  plans  for  liberalizing  the  laws  relating  to  note  issues 
will  be  found  under  the  titles  Asset  currency  and  Elastic 
currency. 

The  term  banking  is  greatly  misused.  Stock  brokers,  dealers 
in  exchange  and  commercial  paper,  note  shavers,  money  lend- 
ers and  money  changers  often  describe  themselves  as  engaged 
in  banking  and  dignify  their  offices  with  the  title  banking 
houses.  As  a  fact  they  are  not  engaged  in  banking  and  their 
offices  are  not  banking  houses.  Syndicate  managers  also  often 
describe  their  operations  as  banking ;  their  operations  are 
financing  or  financiering  perhaps,  but  not  banking. 

Banking  power.  The  banking  power  of  a  country  or  a  com- 
munity consists  of  the  capital  and  deposits  of  its  banks  added 
together. 

Bank  note.  A  promissory  note  payable  to  bearer  on  de- 
mand issued  by  a  bank  under  authority  of  law  as  a  circula- 
ting medium. 

Bank  of  deposit.  A  bank  that  receives  deposits  of  money 
and  pays  out  money  on  checks  drawn  against  the  deposits.  For 
additional  information  see  Bank. 

Bank  of  discount.  A  bank  which  discounts  (see  Discount) 
promissory  notes  and  bills  of  exchange.  Savings  banks  are 
not  banks  of  discount,  hut  all  national  and  state  banks  are. 

Bank  of  England.  The  custodian  of  the  public  money  of 
Great  Britain  and  manager  of  the  public  debt.     Tt  is  the  great- 


48  SMITH'S  FINANCIAL  DICTIONARY. 


est  monetary  institution  in  the  world,  a  distinction  which 
formerly  belonged  to  the  Bank  of  Amsterdam.  The  Bank  of 
England  was  incorporated  in  1694  and  began  business  January 
I,  1695.  Its  official  title  is  "The  Governor  and  Company  of 
the  Bank  of  England."  In  Great  Britain  it  is  often  called  the 
"central  institution." 

The  Bank  of  England  conducts  the  banking  business  of  the 
government;  it  receives  the  revenues  of  the  government  and 
makes  disbursements  for  it,  and  it  also  issues  exchequer  and 
treasury  bills  and  advances  money  to  the  government.  It  is 
also  the  London  banks'  bank ;  that  is  to  say,  the  other  banks 
keep  on  their  own  premises  only  enough  of  their  cash  for  the 
requirements  of  their  business  and  deposit  the  remainder  with 
the  Bank  of  England.  The  strength  of  the  Bank  of  England's 
position  is  thus  due  to  the  fact  that  it  is  the  bank  not  only  of 
the  British  government  but  also  of  the  other  London  banks 
and  so  of  the  whole  of  the  London  money  market. 

Bank  of  England  note.  A  circulating  note  (money)  issued 
by  the  Bank  of  England,  which  performs  the  chief  note-issuing 
function  in  the  United  Kingdom. 

Eventually  the  bank  will  possess  the  monopoly  of  note  issue 
in  England  and  Wales.  It  is  permitted  to  issue  a  certain 
amount  of  notes  upon  government  securities  and  it  hns  the 
privilege  of  issuing,  also  on  government  securities,  an  amount 
equal  to  two-thirds  of  the  issues  of  other  banks  in  England  and 
Wales  when  these  go  out  of  existence  or  surrender  their  circu- 
lation. The  Bank  of  England  may  issue  notes  to  any  further 
amount  it  sees  fit  by  providing  and  setting  aside  as  backing 
for  them  an  equal  amount  of  gold  coin  or  bullion.  One-fifth  of 
the  coin  or  bullion  held  as  backing  for  its  notes  may  be 
silver  coin  or  bullion,  but  as  a  fact  silver  is  not  used  by  the 
bank  for  this  purpose.  Silver  cannot  legally  be  tendered  by 
the  bank  for  the  redemption  of  its  notes. 

In  times  of  crisis  when  the  scarcity  of  circulating  medium 
causes  panic  the  bank  is  allowed  by  Parliament  to  increase  the 
number  of  the  notes  that  it  may  issue  against  securities.  This 
is  done  by  the  suspension  of  the  Bank  act,  which  limited  the 
amount  of  the  bank's  circulation  of  notes  backed  only  by 
securities.  The  suspension  is  permitted  by  a  "Letter  of 
license"  from  the  government  of  the  day,  which  promises  that 


SMITH'S  FINANCIAL  DICTIONARY.  49 

the  government  will  propose  a  bill  of  indemnity  if  the  legal 
limit  is  exceeded.     The  Bank  act  was  last  suspended  in  1866. 

The  bank's  notes  are  legal  tender  in  England  and  Wales, 
but  are  not  legal  tender  in  payments  by  the  bank  itself.  The 
holders  of  the  bank's  notes  are  entitled  to  demand  gold  for 
ihem  on  presentation  at  the  bank. 

The  notes  of  the  Bank  of  Ireland  are  legal  tender  in  Ireland. 
The  notes  of  the  other  English,  Irish  and  Scotch  banks  are  not 
legal  tender,  but  they  constitute  an  important  circulating  me- 
dium. 

For  many  years  the  lowest  Bank  of  England  note  was  £20. 
In  1759  £10  and  £15  notes  were  issued;  in  1793  the  first  £5 
note  made  its  appearance;  in  1797  £1  and  £2  notes  were  is- 
sued, but  the  issue  of  these  last  has  ceased  and  now  the  small- 
est denomination  is   £5.     The  largest  denomination  issued  is 
£  1 ,000. 
For  additional  information  see  Bank  of  England  return. 
Bank  of  England  post-bill.     What  in  Great  Britain  is  desig- 
nated as  a  bank  post-bill  is  a  promissory  note  (for  an  amount 
not  less  than  £10)  issued  by  the  Bank  of  England,  undertak- 
ing at  so  many  (usually  seven)  days'  sight  to  pay  such  "sole 
bill  of  exchange"  to  an  assigned  person  or  order.     Not  being 
payable  on  demand  there  is  an  interval  in  which  payment  of  it 
may  be  stopped  and  the  money  saved  in  case  the  bill  is  lost  or 
stolen. 

Bank  of  England  rate.  The  minimum  rate  of  discount  of  the 
Bank  of  England. 

The  rate  is  nominally  the  rate  at  which  the  Bank  of  England 
itself  will  discount  best  three  months'  bills.  It  is  in  fact  the 
official  standard  of  discount.  It  is  often  called  the  "official 
minimum,"  for  it  is  the  minimum  rate  of  the  bank  which  is  the 
official  bank — the  government's  bank. 

The  rate  has  a  direct  relation  to  the  movement  of  gold  to  and 
from  London.  For  instance,  the  raising  of  the  rate  raises  the 
value  of  money  and  is  calculated  to  attract  sfold  from  foreisfn 
'•  centres  where  the  value  of  money  is,  for  the  time  being  at  least, 
less.  The  directors  of  the  bank  often  insure  the  eiifectiveness 
of  the  rate  by  borrowing  in  the  money  market,  thus  denud- 
ing it  of  supplies.     As  the  raising  of  the  bank's  rate  raises  the 


30  SMITH'S  FINANCIAL  DICTIONARY. 

value  of  money  so  the  lowering  of  it  lowers  the  value  of  money. 

Late  every  afternoon  the  bank  issues  a  statement  showing 
the  amount  of  gold  withdrawn  from  its  supply  for  foreign 
shipment  or  received  by  it  from  abroad  during  the  day  and 
generally  telling  whither  it  has  been  sent  or  whence  it  has 
come. 

Bank  of  England  reserve.  This  does  not  figure  by  name  in 
the  weekly  return  (statement)  of  the  bank,  which  is  issued  on 
Thursday  and  shows  the  condition  of  the  bank  at  the  close  of 
business  the  day  before.  It  is  represented  by  two  items  in 
the  report  of  the  banking  department  (there  is  also  an  issue  de- 
partment), "iNotes"  and  "Gold  and  silver  coin." 

The  reserve  consists  of  all  the  notes  the  bank  has  in  its 
"till"  and  all  the  gold  and  silver  coin  it  holds  after  it  has  set 
aside  the  amount  of  gold  coin  and  bullion  required  as  backing 
for  the  notes  it  has  issued  in  excess  of  the  "authorized  issue." 
The  "authorized  note  issue"  of  the  bank  is  backed  by  a  perma- 
nent debt  of  the  government  to  the  bank,  designated  in  the 
return  as  "government  debt,"  and  by  "other  securities."  Any 
issue  in  excess  of  the  "authorized  note  issue"  has  to  be  backed 
by  setting  aside  gold  coin  and  bullion  which  the  bank  holds. 

If  the  reserve  is  low  and  gold  is  going  abroad  the  bank  di- 
rectors are  likely  to  raise  the  bank's  discount  rate;  if  the  re- 
serve is  high  (large)  and  gold  is  coming  in  or  showing  no  sign 
of  going  out  the  directors  are  likely  to  lower  the  rate. 

There  is  a  permanent  reserve  fund  designated  as  the  "rest." 
This  fmid  represents  the  accumulated  profit  of  the  bank  and 
is  never  allowed  to  fall  below  £3,000,000.  The  surplus  over 
£3,000,000  at  the  end  of  each  half-year  is  treated  by  the  di- 
rectors as  the  amount  available  for  a  dividend  to  the  pro- 
prietors (stockholders)  of  the  bank. 

The  Bank  of  England  does  not  allow  interest  on  deposits, 
partly  for  the  reason  that  if  it  were  to  allow  interest  it  would 
be  obliged  to  employ  its  resources  to  a  larger  extent ;  thus  the 
proportion  between  its  reserve  and  its  liabilities  would  be 
lowered  and  thereby  its  strength  would  be  impaired.  The 
average  reserve  maintained  by  the  bank  is  43  per  cent^ — that  is, 
its  average  holdings  in  its  banking  department  of  its  own  notes 
and  gold  and  silver  coin  are  equal  to  43  per  cent  of  its  "public 


SMITH'S  FINANCIAL  DICTIONARY.  51 


deposits"'  and  '"other  deposits"  combined.  The  reserve  is 
seldom  allowed  to  fall  below  30  per  cent,  while  it  sometimes 
rises  above  50  per  cent. 

Bank  of  England  rest.  The  rest  is  the  accumulated  profit 
or  surplus  of  the  Bank  of  England.  It  is  never  allowed  to  fall 
below  £3,000,000.  The  dividend  which  is  declared  half-yearly 
is  declared  only  out  of  the  amount  of  the  rest  in  excess  of 
£s. 000.000. 

Bank  of  England  return.  This  is  published  every  Thurs- 
dav  and  shows  the  condition  of  the  bank  at  the  close  of  busi- 
ness the  day  before. 

It  is  divided  into  two  parts,  one  headed  "Issue  depart- 
ment" and  the  other  headed  "Banking  department."  Under 
the  heading  "Issue  department"  there  is  only  one  debit  item — 
"Notes  issued."  There  are  three  credit  items — "Government 
debt."  "Other  securities"  and  "Gold  coin  and  bullion."  "Notes 
issued"  means  the  circulating  notes  (paper  money)  issued  by 
the  issue  department  of  the  bank.  "Government  debt"  means 
a  permanent  debt  of  the  government  to  the  bank  which  the 
bank  is  allowed  to  count  as  backing  (security)  for  part  of  the 
notes  included  in  the  so-called  "authorized  issue."  "Other 
securities"  means  securities  provided  as  backing  for  the  re- 
mainder of  the  notes  included  in  the  authorized  issue.  "Gold 
coin  and  bullion"  means  gold  coin  and  bullion  set  aside  from 
the  bank's  holdings  as  backing  for  notes  issued  in  excess  of  the 
authorized  issue.  The  three  credit  items  combined  represent 
the  total  backing  for  notes  issued  by  the  bank.  The  bank  has 
the  right  to  issue  notes  in  excess  of  the  authorized  issue  to  any 
amount  so  long  as  it  provides  backing  in  the  shape  of  gold  coin 
and  bullion. 

Under  the  heading  "Banking  department"  the  debit  items 
are:  "Proprietors'  capital"  (the  capital  stock  of  the  bank); 
"Rest"  (the  accumulated  profit  of  the  bank)  ;  "Public  deposits" 
(the  amount  of  money  belonging  to  the  government  on  deposit 
with  the  bank)  ;  "Other  deposits"  (money  on  deposit  with  the 
bank  other  than  that  belonging  to  the  government)  ;  "Seven 
days'  and  other  bills"  (promissory  notes  issued  by  the  bank — 
see  Bank  of  England  post-bill).  The  credit  items  under  the 
heading  "Banking  department"  are:  "Government  securities" 
(government  securities  owned  by  the  bank)  ;  "Other  securi- 


5^ 


SMITH'S  FINANCIAL  DICTIONARY. 


ties''  (the  bank's  other  investments,  whether  in  securities,  bills 
of  exchange  or  advances  to  its  customers  and  to  the  market 
in  general)  ;  "Notes"  (bank  notes  in  the  "till"  of  the  bank)  ; 
"Gold  and  silver  coin"  (gold  and  silver  coin  in  the  "till"  of  the 
bank). 

The  Bank  of  England  return  represents  the  condition  of  all 
the  banks  in  London  to  practically  the  same  extent  that  the 
weekly  statement  of  the  associated  banks  represents  the  condi- 
tion of  all  the  banks  in  New  York. 

The  debit  item  "Other  deposits"  in  the  Bank  of  England's 
return  represents  not  only  the  money  deposited  by  people  who 
bank  directly  with  the  Bank  of  England  (which  by  the  way  is 
a  comparatively  insignificant  amount),  but  also  the  money 
deposited  by  people  in  the  other  banks,  for  these  banks  in  turn 
deposit  the  money  with  the  Bank  of  England,  which  is  the 
banks'  bank.  Thus,  the  item  "Other  deposits"  represents,  or 
rather  reflects,  the  available  supply  of  cash  in  the  London 
money  market.  The  credit  item  "Other  securities"  includes 
the  indebtedness  of  the  money  market  to  the  bank.  It  corre- 
sponds in  a  way  to  the  item  "Loans"  in  the  weekly  statement 
of  the  associated  banks  of  New  York  for  the  reason  that  it 
represents  the  bank's  advances  as  well  as  its  investments  in 
securities. 

Following  is  the  form  in  which  the  Bank  of  England  return 
is  made  up : 

Issue  Department. 


Notes  issued 50,824,615 


50,824,615 


Government   de1)t 11,015,100 

Other   securities 6,759,900 

Gold  coin  and  bullion 33,049,615 


50,824.615- 


Banking   Deparlment 
£ 


Proprietors"   capilril 14,553,000 

Rest    3,134,56s 

Public  deposits 9,124,658 

Other  deposits 40,007,739 

Seven  days'  and  other  I)il]s      184,840 


67,004,802 


Government    securities.  .  .  .  17,015,083 

Other   securities -5,833,973 

Notes  21,347,245 

Gold   ,-ind    silver  coin 2,298,501 


67,004.802 


SMITH'S  FINANCIAL  DICTIONARY. 53 

Bank  of  England  statement.  See  Bank  of  England  return, 
which  is  the  correct  term. 

Bank  of  France.  An  institution  in  Paris  corresponding  to 
the  Bank  of  England  in  London. 

The  present  Bank  of  France  was  established  by  the  First 
Napoleon  and  began  business  on  February  20,  1800.  The  gov- 
ernor of  the  bank  is  appointed  for  life  and  there  is  a  general 
council  of  regents.  The  bank  is  a  private  institution,  its 
shares  being  held  by  individuals,  but  it  is  under  control  of  the 
state  (government). 

The  bank  has  the  sole  privilege  of  issuing  notes.  The  issu- 
ance of  notes  is  made  by  direction  of  the  council  of  regents, 
which  reports  to  and  is  accountable  to  the  government.  The 
notes  have  no  other  security  than  the  general  assets  of  the 
bank,  but  the  government  sustains  the  bank  when  necessary 
with  its  credit.  The  bank  protects  its  gold  reserve  by  charg- 
ing a  premium  on  gold  when  the  metal  is  demanded  for  export. 

Bank  of  Germany.  See  Imperial  Bank  of  Germany,  which 
is  the  official  name. 

Bank  of  issue.  A  bank  that  has  the  right  to  issue  its  notes 
for  circulation  as  money.  For  additional  information  see 
Bank. 

Bank  of  North  America.  The  Bank  of  North  America  in 
Philadelphia  is  the  oldest  existing  bank  in  the  United  States. 
The  Continental  Congress  of  the  thirteen  original  states 
granted  but  one  bank  charter,  and  it  was  a  perpetual  one,  to 
the  Bank  of  North  America.  The  claim  is  made  on  behalf  of 
the  bank  that  this  charter  is  still  in  force,  although  the  bank 
now  conducts  business  under  the  National  currency  act  of  Feb- 
ruary 20,  1863,  the  title  of  which  was  changed  on  June  20,  1874, 
to  National  bank  act. 

The  bank  began  business  under  its  original  charter  January 
7,  1782.  On  March  26,  1782,  the  bank  obtained  a  perpetual 
charter  from  the  state  of  Pennsylvania  and  conducted  its 
afifairs  under  this  second  charter  until  it  w'as  repealed  by 
the  legislature  three  years  later.  Then  its  operations 
were  continued  under  its  original  charter.  A  new  but  not  per- 
petual charter  was  obtained  from  the  state  of  Pennsylvania  in 
1787  and  under  this  charter,  which  was  renewed  from  time  to 
time,  the  bank  did  business  until  December  3,  1864,  when  it 


54  SMITH'S  FINANCIAL  DICTIONARY. 

became  a  national  banking  association  under  the  provisions  of 
the  National  currency  act. 

Bank  of  the  United  States.  There  were  two  institutions 
bearing  this  title  that  acted  as  fiscal  agents  of  the  United  States 
governmenti 

The  first  Bank  of  the  United  States  was  chartered  by  Con- 
gress in  1791  and  went  into  liquidation  on  the  expiration  of 
its  charter  in  181 1.  The  second  Bank  of  the  United  States 
was  chartered  by  Congress  in  1816;  on  the  expiration  of  its 
national  charter  in  1836  it  was  rechartered  by  the  legislature 
of  Pennsylvania  as  the  United  States  Bank  of  Pennsylvania 
and  went  into  liquidation  in  1841. 

Also  see  Fiscal  Bank  of  the  United  States. 

Bank  paper.  This  term  is  an  abbreviation  of  bankable 
paper;  it  means  commercial  paper  (acceptances,  or  in  other 
words,  bills  of  exchange  or  drafts  which  have  been  accepted 
and  promissory  notes)  that  is  of  such  good  quality  that  a  bank 
will  readily  discount  (buy)  it.  Accordingly,  it  also  applies  to 
commercial  paper  when  the  paper  bears  the  indorsement  of  a 
bank.  The  usual  manner  in  which  a  bank  becomes  the  in- 
dorser  of  commercial  paper  is  in  rediscounting.  First  it  buys 
(discounts)  the  paper  and  then  it  sells  (rediscounts)  it  if  it 
desires  cash  or  if  it  can  make  a  satisfactory  profit  by  a  sale. 
The  paper  brings  a  better  price  (the  discount  is  less)  with  the 
bank's  indorsement  than  it  would  bring  without  the  bank's 
indorsement. 

Bank  post-bill.     See  Bank  of  England  post-bill. 

Bank  rate.  This  term  is  generally  applied  to  a  discount  rate 
in  a  foreign  financial  centre.  In  London  it  means  the  discount 
rate  of  the  Bank  of  England,  whereas  the  open  market  rate 
means  the  rate  of  other  banks  and  bankers  and  bill  brokers 
(dealers  in  bank  and  commercial  paper).  In  Paris  the  bank 
rate  is  the  rate  of  the  Bank  of  France ;  in  Berlin  the  bank  rate 
is  the  rate  of  the  Imperial  Bank  of  Germany,  and  so  on.  In 
New  York  the  term  bank  rate  is  used  to  distinguish  the  uni- 
form rate  made  by  the  banks  from  the  varying  rates  made  by 
other  lenders. 

In  London  when  the  Bank  of  England  makes  a  rate  the  other 
lenders  adopt  it  if  possible  or  sometimes  even  quote  a  higher 
rate,  but  if  they  find  they  cannot  do  business  at  it  they  make 


SMITH'S  FINANCIAL  DICTIONARY. 55 

a  lower  rate,  and  so  it  is  in  Paris,  Berlin,  etc.  In  New  York 
if  other  lenders  cannot  do  business  at  the  rate  adopted  by  the 
banks  they  make  a  lower  one. 

Bank  reserve.  The  reserve  of  a  bank  is  the  amount  of  law- 
ful money  it  holds  against  deposits. 

The  places  in  which  national  banks  are  situated  are  divided 
into  three  classes — places  which  are  not  reserve  cities,  reserve 
cities  and  central  reserve  cities.  Places  which  are  not  reserve 
cities  comprise  the  greater  number  of  places,  national  banks  in 
which  are  required  to  maintain  a  reserve  of  (keep  on  hand) 
15  per  cent  of  the  amount  of  deposits  with  them,  three-fifths 
of  which  reserve,  however,  may  be  deposited  by  them  in  banks 
in  reserve  or  central  reserve  cities.  National  banks  in  places 
which  are  not  reserve  cities  are  unofficially  designated  as 
country  banks. 

Reserve  cities  are  Albany,  Baltimore,  Boston,  Brooklyn, 
Cincinnati,  Cleveland,  Columbus,  Denver,  Des  Moines,  De- 
troit, Houston,  Indianapolis,  Kansas  City,  Kan.,  Kansas  City, 
Mo.,  Lincoln,  Los  Angeles,  Louisville,  Milwaukee,  Minne-/ 
apolis.  New  Orleans,  Omaha,  Philadelphia,  Pittsburg,  Port- 
land, Ore.,  St.  Joseph,  St.  Paul,  San  Francisco,  Savannah, 
Washington.  National  banks  in  these  cities  must  keep  on 
hand  25,  per  cent  of  the  amount  on  deposit,  one-half  of  which 
may  be  deposited  in  central  reserve  banks. 

Central  reserve  cities  are  Chicago,  New  York,  St.  Louis. 
National  banks  in  these  cities  must  keep  on  hand  25  per  cent 
of  their  deposits. 

In  1902  the  Secretary  of  the  Treasury  (Leslie  M.  Shaw)  sus- 
pended the  requirement  to  keep  a  reserve  against  government 
funds  on  deposit  in  national  banks  upon  the  ground  that  these 
funds  were  special  deposits  which  were  fully  secured  by  pledge 
of  bonds  with  the  Treasurer  of  the  United  States. 

A  state  bank  in  New  York  state  is  required  in  a  city  of  more 
than  800,000  inhabitants  to  keep  a  reserve  of  15  per  cent  and 
in  a  place  of  less  than  800,000  inhabitants  it  is  required  to  keep 
a  reserve  of  10  per  cent.  This  is  called  in  the  law  "lawful  money 
reserve."  The  requirement  is  the  same  in  the  case  of  a  private 
bank  or  banker  operating  under  the  supervision  of  the  banking 
department.  One-half  of  the  reserve  may  be  deposited  sub- 
ject to  call  with  any  bank  or  trust  company  having  a  capital  of 


j6  SMITH'S  FINANCIAL  DICTIONARY. 


not  less  than  $200,000  and  approved  by  the  superintendent  of 
banking  as  a  depository. 

A  trust  company  is  not  required  to  keep  a  reserve.  The 
New  York  state  law  requires,  however,  that  the  capital  of  the 
company  shall  be  invested  in  bonds  and  mortgages  on  unen- 
cumbered real  property  (real  estate)  in  the  state  worth  at  least 
double  the  amount  loaned  thereon  or  in  the  stocks  or  bonds 
of  the  state  or  of  the  United  States  or  of  any  county  or  in- 
corporated city  of  the  state  duly  authorized  by  law  to  be 
issued. 

*K  savings  bank  in  New  York  state  is  not  required  to  keep  a 
reserve,  the  object  of  a  savings  bank  being  profitably  to  employ 
as  fully  as  possible  the  funds  entrusted  to  it.  It  may,  however, 
keep  on  hand  a  fund  not  exceeding  10  per  cent  of  its  deposits. 
A  savings  bank  is  subject  to  many  restrictions  as  to  the  char- 
acter of  its  investments  and  the  collateral  on  which  it  may 
loan. 

For  information  as  to  the  reserve  of  the  Bank  of  England 
see  Bank  of  England  reserve. 

Bank  runner.  The  name  applied  to  a  messenger  employed 
by  a  bank. 

Bankruptcy.  The  state  of  being  bankrupt  or  insolvent;  in- 
ability to  meet  obligations. 

A  debtor  in  financial  difficulties  is  privileged  to  make  all  rea- 
sonable efforts  to  extricate  himself  and  to  this  end  he  may 
execute  a  mortgage  or  give  any  other  lien  to  one  furnishing 
him  money  at  the  time  and  this  mortgage  or  lien  will  be  sus- 
tained though  the  debtor  should  be  declared  a  bankrupt  within 
four  months  thereafter.  The  secured  creditor  must  first  ex- 
haust his  security  and  then  he  can  come  in  only  for  a  pro-rata 
share  upon  the  amount  left  unpaid. 

A  payment  of  money  by  an  insolvent  within  four  months  of 
his  actual  bankruptcy  creates  a  preference  like  the  delivery  of 
any  other  property  by  the  debtor  to  his  creditor.  The  creditor 
thus  preferred  if  he  knew  at  the  time  of  payment  or  had  rea- 
sonable cause  to  believe  that  it  was  paid  to  him  by  preference 
can  be  compelled  to  return  the  money  to  the  trustee  in  bank- 
ruptcy. If,  however,  he  did  not  know  or  have  reasonable 
ground  for  believing  that  he  was  being  made  a  preferred  cred- 
itor he  cannot  be  compelled  to  return  the  money.     But  in  such 


SMITH'S  FINANCIAL  DICTIONARY.  57 

a  case  he  cannot  collect  any  dividend  upon  any  remainder  of  his 
debt  unless  he  does  return  what  he  has  received.  He  may  re- 
tain what  he  has  and  waive  all  claim  to  the  balance  or  he  may 
return  what  he  has  received  and  be  included  among  the  other 
creditors  for  a  dividend  upon  the  whole  of  his  debt. 

When  an  insolvent  has  been  discharged  in  bankruptcy  any 
real  estate  or  personal  property  to  which  he  may  take  title 
thereafter  is  free  from  claims  existing  against  him  prior  to  the 
bankruptcy  proceedings  whether  those  claims  had  been  re- 
duced to  judgments  or  not.  The  intent  of  the  law  is  that  a 
debtor  shall  surrender  whatever  property  he  has  to.  be  dis- 
tributed among  his  creditors  and  that  he  shall  thereby  be  freed 
from  further  liability  for  those  particular  debts. 

A  law  of  any  state  which  conflicts  with  the  national  bank- 
ruptcy law  is  to  that  extent  invalid. 

Bank's  bill  or  banker's  bill.  A  bill  of  exchange  (draft) 
issued  by  a  bank  or  banker. 

Bank  statement.  A  statement  or  exhibit  of  the  condition 
of  banks. 

In  New  York  the  bank  statement  is  issued  from  the  clearing 
house  on  Saturday.  The  consolidated  statement  (or  as  it  is 
officially  designated,  the  "summary  of  the  weekly  statement  of 
the  associated  banks"')  is  the  collective  showing  by  the  banks 
belonging  to  the  clearing  house — the  showing  when  the  re- 
turns of  the  individual  banks  have  been  consolidated  (put  to- 
gether). 

The  consolidated  bank  statement  shows  the  average  de- 
posits, loans,  specie,  legal  tenders,  circulation,  reserve  and 
surplus  reserve  of  the  banks  for  the  week  ending  with  and  in- 
cluding Friday. 

The  term  deposits  includes  the  net  deposits  (credit  balances) 
of  persons  and  concerns  (designated  as  individual  deposits), 
balances  to  the  credit  of  other  banks  and  all  money  and  credits 
subject  to  withdrawal.  Loans  include  money  loaned  and  like- 
wise paper  (promissory  notes,  drafts,  etc.)  bought.  Specie  in- 
cludes not  only  gold  and  silver  coins,  but  also  gold  certificates 
-and  silver  certificates,  which  are  redeemable  in  gold  or  silver, 
as  the  case  nlay  be.  Legal  tenders  as  the  term  is  used  in  the 
bank  statement  means  United  States  notes  (greenbacks)  and 


58  SMITH'S  FINANCIAL  DICTIONARY. 

Treasury  notes  (notes  issued  for  silver  bullion  purchased  under 
the  so-called  Sherman  act). 

Note. — As  defined  by  the  statutes  legal  tenders  include  United  States 
notes,  Treasury  notes,  gold  and  silver  coins  and  minor  coins,  but  not  gold 
certificates,  nor  silver  certificates ;  see  Legal  tender. 

Circulation  means  the  notes  issued  by  national  banks,  to 
secure  the  redemption  of  which  government  bonds  have  to  be 
purchased  by  the  banks  and  deposited  with  the  Treasurer  of 
the  United  States.  A  bank  cannot  count  circulation  in  its 
reserve;  whether  it  is  its  own  circulation  or  the  circulation  of 
some  other  bank  makes  no  difference.  Reserve  means  the 
total  amount  of  specie  and  legal  tenders  held.  Surplus  reserve 
means  the  amount  of  money  held  in  excess  of  legal  require- 
ment. A  national  bank  (in  New  York  city)  must,  by  law, 
maintain  a  reserve  equal  to  25  per  cent  of  its  deposits ;  a  state 
bank  must,  by  law,  maintain  a  reserve  of  15  per  cent.  In  com- 
piling the  bank  statement  a  reserve  of  25  per  cent  is  allowed 
or  figured  for  state  banks  as  well  as  for  national  banks. 

The  consolidated  statement  formerly  was  issued  from  the 
clearing  house  in  the  following  form,  the  changes  (increases 
and  decreases)  resulting  from  comparison  with  the  preceding 
statement  (the  statement  issued  the  week  before)  : 

Loans    $874,647,900  $2,344,000  Increase. 

Specie     152,338,200  1,068,300  Increase. 

Legal  tenders 67,274,300  1,319,000  Decrease. 

Deposits    872,340,600  164,600  Increase. 

Circulation  36,072,500  41 1,600  Increase. 

Decrease  of  reserve  $291,850. 

The  (final)  item  reserve  in  the  statement  as  issued  from  the 
clearing  house  meant  surplus  reserve,  although  not  specifically 
so  stated. 

In  the  newspapers  the  statement  appeared  as  follows,  being 
elucidated  so  as  to  show  the  reserve  held  (that  is,  specie  and 
legal  tenders,  which  are  generally  referred  to  as  cash  holdings), 
the  reserve  required  and  the  surplus  reserve,  with  the  changes 
in  these  items : 

Current  week.  Preceding  week.     Changes.   ' 

Loans     .  .  .  , $874,647,900  $872,303,700     Inc  .$2,344,200 

Deposits    872,340,600  872,176,000     Inc.       164,600 

Circulation    36,072,500  35,660,900      Inc.       411,400 

Legal  tenders   67,274.300  68,593,300     Dec.    1,319,000 

Specie    152,338,200  151,269,900     Inc.    1,068,300 

Reserve  held   $219,612,500  $219,863,200     Dec.    $250,700 

Reserve  required    218,085,150  218,044,000     Inc.        41,150 

Surnlus    $i,527,3So  $1,819,200     Dec.    $291,850 


SilIITirS  FINANCIAL  DICTIONARY.  59 

In  1902  the  Secretary  of  the  Treasury  (Leslie  M.  Shaw)  sus- 
pended the  requirement  to  keep  a  reserve  against  government 
funds  on  deposit  in  national  banks  upon  the  ground  that  these 
funds  were  special  deposits  which  were  fully  secured  by  pledge 
of  bonds  with  the  Treasurer  of  the  United  States.  This  action 
by  the  Secretary  of  the  Treasury  caused  a  change  in  the 
make  up  of  the  bank  statement  by  the  addition  to  it  of  figures 
showing  the  average  amount  of  government  funds  on  deposit. 
The  consolidated  statement  was  thereafter  issued  from  the 
clearing  house  in  the  following  form : 

Loans   $874,647,900  $2,344,200  Increase. 

Specie   152,338,200  1,068,300  Increase. 

Legal  tenders   67,274,300  1,319,000  Decrease. 

*Deposits     872,340,600  164,600  Increase. 

Circulation    36,072,500  411,600  Increase. 

Reserve  on   all   deposits    291,850  Decrease. 

Reserve  on  deposits,  other  than 

United  States    325,825  Decrease. 

*  United  States  deposits  included,  $40,633,400. 

In  the  newspapers  the  statement  was  made  up  in  both  the 
old  and  the  new  forms  as  follows : 

Current  week.  Preceding  week.     Changes. 

Loans    $874,647,900  $872,303,700     Inc  .$2,344,200 

Deposits    872,3J.o,6oo  872,176,000     Inc  .       164,600 

Circulation   36,072,500  35,660,900      Inc.       411,400 

Legal  tenders    67,274,^00  68,593,300     Dec.    1,319,000 

Specie    152,338,200  151,269,900     Inc.    1,068,300 

Reserve  held  $219,612,500  $219,863,200     Dec.    $250,700 

Reserve  required   218,085,150  218,044,000     Inc  .        41,150 

Surplus    $1,527,350  $1,819,200     Dec.    $291,850 

Deducting  the  United  States  deposits  held  by  the  banks  from  the 
aggregate  deposits  the  bank  statement  compares  as  follows 

Current  week.     Preceding  week.     Changes. 

Total  deposits $872,340,600  $872,176,000     Inc.    $161,600 

United  States  deposits  ..     40,633,400  40,769,300     Dec.       135,900 

Deposits  25  per  cent. .  .$831,707,200  $831,406,700     Inc.    $300,500 

Reserve  held  219,612,500  219,863,200     Dec.      250,700 

Reserve  required   207,926,800  207,851,675     Inc  .         75,125 

Surplus    $11,685,700  $12,011,525     Dec.    $325,825 

The  detailed  bank  statement,  which  is  issued  simultaneously 
with  the  consolidated  statement,  contains  first  the  number  of 
each  bank  (each  bank  has  a  number  by  which  it  is  known  at 
the  clearing  house)  and  then  the  name  of  the  bank,  after  which 
follow  the  amounts  of  its  capital,  net  profits  (surplus  and  un- 
divided profits),  specie,  legal  tenders,  deposits  and  circulation. 


6o  SMITH'S  FINANCIAL  DICTIONARY. 

The  bank  statement  is  said  to  have  been  made  up  on  rising 
averages  when  the  items  in  it  have  been  increasing  in  amount 
during  the  week ;  or  the  statement  is  said  to  have  been  made  up 
on  falhng  averages  when  the  items  in  it  have  been  decreasing 
in  amount  during  the  week. 

Generally  speaking  the  bank  statement  is  favorable  or 
good  when  it  shows  that  the  position  of  the  banks  has  been 
strengthened,  as  by  an  increase  in  the  surplus  reserve  through 
or  by  means  of  an  increase  in  their  cash  holdings  rather  than 
by  a  decrease  in  their  deposits,  which  often  is  effected  by  the 
calling  of  loans — by  demanding  and  obtaining  the  payment  of 
money  loaned  on  call.  As  money  loaned  is  credited  to  bor- 
rowers on  their  deposit  accounts  and  increases  the  total  de- 
posits of  the  banks  so  the  payment  of  loans  by  borrowers 
takes  from  and  decreases  deposits.  As  will  be  seen  the  calling 
and  consequent  payment  of  loans  does  not  increase  cash  hold- 
ings but  merely  changes  balances  in  individual  accounts.  A 
reduction  in  deposits  reduces  the  amount  of  cash  required  to 
be  held  as  a  legal  reserve  and  correspondingly  expands  (in- 
creases) the  surplus  reserve. 

Generally  speaking,  also,  the  bank  statement  is  unfavorable 
or  if  particularly  unfavorable  is  bad  when  the  position  of  the 
banks  has  been  weakened,  as  by  a  decrease  in  the  surplus  re- 
serve through  a  decrease  in  their  cash  holdings  rather  than  by 
an  increase  in  their  deposits,  which  often  is  effected  by  an 
expansion  in  (increase  in  the  amount  of)  their  loans,  which 
correspondingly  expands  (increases)  their  deposits  and 
correspondingly  increases  the  amount  of  cash  required  to  be 
held  as  a  legal  reserve.  This  additional  amount  is  deducted 
from  and  correspondingly  reduces  the  surplus  reserve. 

The  bank  statement  may  be  said  to  be  favorable  or  good, 
however,  if  an  increase  in  loans  is  reported  when  the  banks 
are  surfeited  with  money ;  also  the  bank  statement  may  be  said 
to  be  unfavorable  or  rather  not  good  (but  hardly  bad)  when 
it  shows  that  money  is  accumulating  in  idleness  in  the  banks — 
when  deposits  are  increasing,  not  as  a  result  of  increasing 
loans,  but  in  the  absence  of  a  borrowing  demand  for  money. 

There  are  other  circumstances  which  make  the  bank  state- 
ment favorable  or  unfavorable  as  disclosed  in  the  circum- 
stances themselves. 


SMITH'S  FINANCIAL  DICTIONARY.  6i 

There  is  also  a  nou-nieinber  bank  statement,  which  is  a 
statement  of  the  condition  of  banks  which  are  not  members  of 
the  clearing  house  but  clear  through  members.  This  state- 
ment is  issued  from  the  clearing  house  on  Monday  and  shows 
the  average  condition  of  the  banks  for  the  week  ending  with 
and  including  tlie  preceding  P'riday. 

The  non-member  bank  statement  contains  the  name  of  each 
bank  followed  by  its  capital,  net  profits,  average  amount  of 
loans  and  discounts  and  investments,  average  amount  of 
specie,  average  amount  of  legal  tender  notes  and  (national) 
bank  notes,  average  amount  on  deposit  with  its  clearing  house 
agent  (the  bank  through  which  it  clears  at  the  clearing  house), 
average  amount  on  deposit  with  other  New  York  city  banks 
and  trust  companies,  average  amount  of  net  deposits  and 
average  amount  of  circulation. 

Bank  stock.  The  capital  stock  of  a  bank.  When  the  term 
is  used  indefinitely  it  means  the  capital  stock  of  some  bank, 
but  of  no  bank  in  particular. 

In  London  bank  stock  means  the  stock  of  the  Bank  of  Eng- 
land. 

Bar.     See  Gold  bar;  see  Silver  bar. 

Bargain.  A  mutual  contract,  agreement  or  understanding 
between  two  or  more  parties  as  to  something  to  be  done,  trans- 
ferred   or  the  like ;  or  as  to  terms    or  methods. 

The  term  bargain  also  means  an  advantageous  transaction ; 
or  something  bought  or  ofifered  at  a  low  price. 

To  bargain  means  to  dicker;  to  haggle  over  price  or  terms. 

On  the  London  Stock  Exchange  the  term  employed  for  a 
transaction  between  two  members  is  bargain. 

Bargain  chop.  A  term  formerly  used  by  foreign  traders  in 
China  and  applied  to  an  option  (see  Option)  on  opium. 

Bargain  counter.  In  Wall  Street  when  stocks  are  cheap 
(low  in  price)  they  are  said  to  be  on  the  bargain  counter. 

Bargain-hunter.  Wall  Street  name  for  an  investor  who- 
awaits  his  opportunity  to  buy  in  slumps  or  declines  when 
prices  are  low  (cheap) — when  bargains  in  securities  are  to  be 
obtained. 

Bargain  marked.  London  Stock  Exchange  term,  meaning 
that  a  transaction  has  been  recorded  on  the  "marking  board"" 


62  SMITHS  FINANCIAL  DICTIONARY. 

from  which  it  is  reproduced  in  the  official  Hst.  See  Marking 
bargains. 

Barrel.  The  standard  or  commercial  barrel  of  pork  is  reck- 
oned at  200  pounds.  It  contains  190  pounds  of  fresh  or  green 
meat  and  the  addition  of  brine  increases  the  weight  to  220  or 
225  pounds.  A  barrel  of  flour  contains  196  pounds ;  salt,  280 
pounds;  resin,  280  pounds;  cured  fish,  200  pounds.  The  num- 
ber of  gallons  in  a  barrel  of  molasses,  syrup,  oil,  turpentine, 
vinegar,  wine,  liquor   or  other  liquid    varies  from  40  to  50. 

Barren  money.  A  term  applied  to  money  that  is  earning  no 
interest. 

Barter.     The  exchange  of  commodities  or  services ;  trade. 

Base-metal  money.  Money  made  of  metals  less  valuable 
than  gold  and  silver.  Base-metal  money  in  the  United  States 
consists  of  the  minor  coins,  the  5-cent  nickel  and  the  i-cent 
bronze  coins. 

Base-metal  token.  Same  as  base-metal  money ;  in  the 
United  States  the  base-metal  tokens  are  the  minor  coins,  the 
nickel  5-cent  piece    and  the  bronze  i-cent  piece. 

Basis  price.  A  price  which  does  not  include  items,  sizes, 
qualities,  etc.,  for  which  the  trade  usually  makes  an  extra 
charge. 

"B"  bond.  A  bond  in  an  issue  divided  into  a  series  num- 
bered alphabetically. 

Bear.  A  speculator  who  works  to  secure  or  who  believes  in 
lower  prices ;  one  wdio  sells  stock  short  (sells  stock  he  does  not 
own)  in  expectation  of  buying  back  at  a  lower  price.  A  specu- 
lative dealer  in  grain,  cotton  or  any  other  commodity  may  be 
a  bear. 

A  speculator  may  be  a  bear  ostensibly  but  not  a  bear  in 
fact.  For  instance,  he  may  desire  to  acquire  stock,  but  to  do 
so  to  advantage  he  first  depresses  the  price  by  wash  orders 
(see  Washing)  or  other  devices.  He  actually  buys  (goes 
long)  of  the  stock  at  the  low  price  and  if  the  stock  then  ad- 
vances above  the  original  price  the  speculator  increases  his 
profit  to  the  extent  of  the  decline  eflfected  by  him  preliminary 
to  his  actual  purchases. 

The  French  for  bear  is  baissier. 

Bear  account.  Uondon  Stock  Exchange  term  ;  means  the 
interest  in  the  market  which  has  sold  stocks  that  it  does  not 


SMITH'S  FINANCIAL  DICTIONARY.  63 

own  and  does  not  mean  to  deliver  and  is  waiting  for  a  fall  in 
order  to  buy  them  back  for  less  than  the  price  that  they  were 
sold  for.  The  term  is  also  applied  to  the  volume  of  commit- 
ments open  on  the  bear  (short)  side.  For  additional  informa- 
tion see  Account,  The. 

Bear  dance.  A  colloquial  term  applied  when  bears  in  stocks 
are  compelled  to  cover  or  are  frightened  into  covering  their 
shorts  at  a  loss — when  they  buy  back  stocks  at  prices  higher 
than  those  at  which  they  sold  them. 

Bearer.     The  holder;  the  person  who  is  in  possession,  as  the 
-person  who  is  in  possession  of  a  check,  bill  (bill  of  exchange) 
or  promissory  note  that  is  payable  to  bearer. 

Bearing  the  market.  A  speculative  designation  of  the  act  of 
forcing  down  prices. 

Bear  market.  A  speculative  term  which  signifies  a  declin- 
ing market ;  in  other  words,  that  the  tendency  of  prices  is 
downward. 

Bear  of  stocks.  London  Stock  Exchange  term  equivalent  to 
the  New  York  Stock  Exchange  expression  short  of  stocks, 
which  means  one  who  has  sold  stocks  that  he  did  not  own  in 
expectation  of  buying  them  back  at  a  lower  price  than  that  at 
which  he  sold  them. 

Bear  panic.  Said  when  bears  in  stocks  are  frightened  into 
covering  their  shorts  at  a  loss,  or  in  other  words,  into  buying 
back  at  a  loss  (at  higher  prices)  the  stocks  they  had  sold  short ; 
see  Short. 

Below  par.  When  the  market  price  is  below  the  par  or  face 
value ;  see  Par. 

Best  paper.  Bills  of  exchange  (drafts)  and  promissory 
notes  of  superior  quality;  specifically,  bank  paper;  see  Bank 
paper. 

Betterment.  Improvement  beyond  mere  repair;  in  the  case 
of  a  railroad  improvement  of  the  physical  condition  of  the 
property. 

Better  price.  A  higher  price  than  the  price  previously  ob- 
tained   or  quoted. 

Between  banks.  This  term  is  applied  to  a  transaction  in 
domestic  exchange  between  two  banks. 

In  some  of  the  less  important  cities  clearing  house  balances 
are  settled,  not  bv  cash,  but  bv  checks  drawn  bv  the  manager 


64  SMITH'S  FINANCIAL  DICTIONARY. 

of  the  clearing  house  against  debtor  banks  and  in  favor  of 
creditor  banks.  The  checks  may  be  paid  in  cash  or  in 
cashier's  checks  which  are  presented  at  the  clearing  house  next 
day  or  they  may  be  paid  in  exchange  on  New  York  (or  some 
other  financial  centre).  If  the  creditor  bank  wishes  to  increase 
its  balance  with  the  bank  which  acts  as  its  correspondent  in 
New  York  it  may  prefer  exchange  on  New  York  and  may 
pay  a  premium  for  the  privilege  of  receiving  it  instead  of  cash 
or  a  cashier's  check.  On  the  other  hand,  if  its  balance  with 
the  New  York  bank  is  excessive  it  may  accept  exchange  on 
New  York  only  at  a  discount. 

It  is  a  transaction  between  banks,  likewise,  if  a  bank  in  a 
certain  place,  in  Chicago,  for  instance,  wishes  to  remit  to,  say, 
New  York  and  buys  a  draft  on  New  York  from  another  bank 
in  Chicago. 

Beyond  sea  trade.  Said  of  trade  with  a  country  beyond  an 
intervening  sea,  as  the  shipping  of  grain  to  a  country  across 
an  ocean. 

Bid  and  asked.  The  bid  price  is  the  amount  which  one  who 
desires  to  buy  ofifers  for  a  thing;  the  asked  price  is  the  amount 
which  one  who  desires  to  sell  asks  for  a  thing. 

In  dealings  on  the  New  York  Stock  Exchange  bids  and 
offers  made  and  accepted  in  accordance  with  these  rules  are 
binding: 

All  offers  to  buy  or  sell  securities  shall  be  for  lOO  shares  of 
stock  or  for  $10,000  par  value  of  bonds  unless  otherwise  stated. 
Offers  to  buy  or  sell  specific  amounts  other  than  as  above 
stated  may  be  made  at  the  same  time  and  may  be  independent- 
ly accepted. 

Bids  and  offers  may  be  made  only  as  follows : 

Cash  (for  delivery  on  the  day  of  contract)-;  regular  way  (for 
delivery  on  the  business  day  following  the  contract)  ;  at  3 
days  (for  delivery  on  the  third  day  following  the  contract)  ; 
buyer's  or  seller's  option  for  not  less  than  4  days  nor  more 
than  60  days. 

Bids  and  offers  under  each  of  these  specifications  may  be 
made  simultaneously  as  being  essentially  different  proposi- 
tions and  may  be  separately  accepted  without  precedence  of 
one  over  the  other. 


SMITH'S  FINANCIAL  DICTIONARY.  65 


Bids  and  offers  without  stated  conditions  are  considered  to 
be  in  the  regular  way. 

In  offers  to  buy  on  seller's  option  or  to  sell  on  buyer's  op- 
tion the  longest  option  has  precedence.  In  offers  to  buy  on 
buyer's  option  or  to  sell  on  seller's  option  the  shortest  option 
has  precedence. 

On  the  New  York  Stock  Exchange  the  first  offer  to  buy  or 
sell  must  be  accepted  before  a  subsequent  offer  at  the  same 
figure  has  standing.  A  subsequent  offer  to  buy  at  a  higher 
or  to  sell  at  a  lower  price  vacates  the  previous  offer  to  buy  or 
sell.     A  transaction  vacates  both  the  previous  bid  and  offer. 

Bid  and  asked  quotations.  The  bid  and  asked  quotations  for 
stocks  dealt  in  on  the  Mew  York  Stock  Exchange  are  those 
printed  by  the  ticker  on  the  tape  after  the  close  of  business  on 
the  exchange  and  while  nominal  are  as  nearly  the  actual  prices 
offered  for  and  asked  for  stocks  as  are  possible  to  obtain.  They 
are  furnished  by  the  specialists  in  the  different  stocks — the 
brokers  who  make  a  specialty  of  executing  orders  in  those 
stocks. 

The  bid  and  asked  quotations  are  the  only  gage  to  the 
market  value  of  stocks  infrequently  dealt  in,  especially  those 
in  which  one  or  more  days  have  elapsed  between  transactions. 

Bid  and  offer.     See  Bid  and  asked. 

Bidding  up.  Making  bids  for  the  purchase  of  stocks  (or 
commodities)  at  prices  higher  than  actual  market  prices. 

Bid  in.  Said  when  property  at  public  vendue  (auction)  is 
bid  for  and  bought  by  parties  in  interest  because  a  high  enough 
price  has  not  been  offered  for  it. 

Again,  the  term  bid  in  applies  when  at  a  foreclosure  sale  the 
property  is  bought  for  parties  in  interest.  In  the  sale  at  fore- 
closure of  a  railroad  the  road  may  be  and  generally  is  bid  in 
in  the  interest  of  the  security  holders. 

Bill.  This  term  applies  to  a  bill  of  exchange  (draft)  or  to  a 
promissory  note   or  any  document  requiring  payment. 

Also,  a  bill  is  a  statement  of  an  account  or  of  money  due ; 
a  paper  setting  forth  the  particulars  and  amount  of  a  debt. 

Bill  at  sight.  A  bill  of  exchange  (draft)  payable  on  pre- 
sentation, except  where  grace  is  allowed  by  law  on  a  sight  bill 
(bill  at  sight).  A  demand  bill  is  generally  construed  as  a  bill 
that  is  payable  absolutely  on  presentation,  although  in  some 


66  SMITHS  FINANCIAL  DICTIONARY. 

states  and  countries  grace  is  allowed  by  law  on  a  demand  bill 
as  well  as  on  a  sight  bill. 

Bill-book.  A  book  used  in  a  bank  in  which  is  kept  a  record 
of  promissory  notes,  bills  of  exchange  (drafts),  etc. 

Bill  broker.  An  English  term ;  same  as  bill  merchant ;  one 
who  negotiates  the  discounting  of  promissory  notes,  bills  of 
exchange,  etc.,  or  who  buys  and  sells  them  for  his  own  profit. 
The  name  bill  broker  does  not  apply  to  a  dealer  in  foreign  ex- 
change. 

Bill  case.  This  term  is  used  more  as  a  figure  of  speech  than 
anything  else.  When  it  is  said  that  a  bank's  bill  case  is  full 
it  is  meant  that  it  has  a  large  stock  (supply)  of  bills — promis- 
sory notes  and  bills  of  exchange  (drafts)  ;  when  it  is  said  that 
a  bank's  bill  case  is  empty  it  means  that  it  has  no  bills  on  hand. 
As  a  fact  most  banks  keep  their  bills  in  a  portfolio. 

Bill  discounted.  This  term  is  generally  accepted  as  mean- 
ing a  note  discounted,  but  it  may  mean  a  draft  discounted. 

Bill  for  acceptance.  The  name  given  to  a  bill  of  exchange 
(draft)  which  is  to  be  presented  to  the  drawee  (the  one  upon 
whom  it  is  drawn)  for  acceptance  by  him,  which  consists  in 
his  writing  on  the  face  of  the  bill  the  word  "Accepted,"  which 
is  equivalent  to  a  promise  to  pay  it  when  it  becomes  due. 
(Also  see  Bill  for  payment).  When  accompanied  by  docu- 
ments a  bill  for  acceptance  is  called  a  documentary  bill  for 
acceptance,  or  for  short,  a  document  for  acceptance. 

A  bill  for  acceptance  may  be  either  a  domestic  or  a  foreign 
bill.  A  merchant  in  Chicago,  for  instance,  may  be  indebted  to 
a  merchant  in  New  York.  Payment,  however,  is  'not  to  be 
made  until  some  time  in  the  future.  The  New  York  merchant 
draws  on  the  Chicago  merchant  for  the  amount  of  the  in- 
debtedness and  forwards  the  draft  for  acceptance  by  the  Chi- 
cago merchant,  or  he  may  sell  the  bill  (draft)  to  a  bank  or  a 
dealer  in  exchange,  who  will  forward  it  for  acceptance. 

Again,  a  merchant  in  London  may  be  indebted  to  a  merchant 
in  New  York.  The  New  York  merchant  draws  on  the  London 
merchant  and  forwards  the  draft  for  acceptance  by  the  Lon- 
don merchant,  or  he  may  sell  the  bill  (draft)  to  a  dealer  in  for- 
eign exchange,  who  will  forward  it  for  acceptance. 

Bill  for  payment.  The  name  given  to  a  bill  of  exchange 
(draft)  which  is  to  be  presented  for  payment  (for  collection), 


SMITHS  I- 1  NAN  CI  AL  DICTIONARY.  67 

as  distinguished  from  a  bill  for  acceptance  (see  Bill  for  accept- 
ance). When  accompanied  by  documents  a  bill  for  payment  is 
called  a  documentary  bill  for  payment,  or  for  short,  a  document 
for  payment. 

A  bill  for  payment  may  be  either  a  domestic  or  a  foreign 
bill.  A  merchant  in  Chicago,  for  instance,  may  be  indebted  to 
a  merchant  in  New  York.  The  New  York  merchant  draws  on 
the  Chicago  merchant  for  the  amount  of  the  indebtedness  and 
deposits  the  draft  in  his  bank,  which  forwards  it  to  Chicago  for 
payment  (for  collection  from  the  Chicago  merchant),  or  he 
may  sell  the  bill  (draft)  to  a  bank  or  a  dealer  in  exchange,  who 
will  forward  it  for  payment  (collection). 

Again,  a  merchant  in  London  may  be  indebted  to  a  mer- 
chant in  New  York.  The  New  York  merchant  draws  on  the 
London  merchant  for  the  amount  of  the  indebtedness  and  for- 
wards the  draft  to  London  for  payment  (for  collection  from 
the  London  merchant),  or  he  may  sell  the  bill  to  a  dealer  in 
foreign  exchange,  who  will  forward  it  for  payment  (collection). 

Bill  merchant.  An  English  term ;  same  as  bill  broker ;  one 
who  negotiates  the  discounting  of  promissory  notes,  bills  of 
exchange,  etc.,  or  who  buys  and  sells  them  for  his  own  profit. 
The  name  bill  merchant  does  not  apply  to  a  dealer  in  foreign 
exchange. 

Bill  of  adventure.  A  written  statement  or  declaration  by  a 
shipper  or  carrier  that  the  shipment  is  the  venture  of  another 
person  and  that  the  shipper  or  carrier  is  responsible  for 
nothing  but  delivery  as  consigned. 

Bill  of  credit.  A  written  request  to  the  one  to  whom  it  is 
addressed  to  give  credit  to  the  bearer  on  the  voucher  or 
security  of  the  writer. 

Bill  of  exchange.  A  written  order  or  request  from  one 
person  to  another  for  the  payment  of  money  to  a  third,  the 
amount  to  be  charged  to  the  drawer  (issuer)  of  the  bill. 

There  is  practically  no  dif^^erence  between  a  bill  of  exchange 
and  a  draft.  The  term  bill  of  exchange,  however,  is  commonly 
applied  to  an  order  for  money  payable  in  a  foreign  country, 
whereas  the  term  draft  is  applied  to  an  order  payable  within 
the  country  of  its  origin. 

A  check  dated  ahead  is  usually  regarded  as  a  bill  of  exchange 
rather  than  a  check. 


68  SMITH'S  FINANCIAL  DICTIONARY. 


It  is  a  common  practise  to  speak  of  a  bill  of  exchange  (draft) 
issued  by  a  bank  or  banker  as  a  check  when  it  is  payable  at 
sight  or  on  demand. 

A  bill  of  exchange  payable  at  a  future  date  becomes  in  fact 
a  note  upon  its  acceptance  by  the  drawee — the  one  upon  whom 
it  is  drawn. 

If  the  amount  stated  in  words  and  the  amount  stated  in  fig- 
ures in  a  bill  of  exchange  do  not  agree  the  words  govern. 

Bills  of  exchange  constitute  the  most  important  circulating 
medium.  The  wholesale  transactions  of  the  world  are  effected 
by  bills  of  exchange,  which  are  not  limited  like  bank  notes  to 
the  country  of  their  origin. 

When  commercial  bills  of  exchange  are  accompanied  by, 
that  is,  secured  by  bills  of  lading  or  warehouse  receipts  or  by 
other  documents  they  are  of  a  superior  nature.  They  com- 
mand a  lower  rate  of  discount,  or  in  other  words,  bring  a  bet- 
ter price  than  bills  not  secured.  In  a  stringent  money  market 
they  are  salable  when  other  bills  are  refused.  Bills  not  secured 
by  property  are  loans  on  personal  security. 

For  additional  information  see  Domestic  exchange ;  also  see 
Foreign  exchange.  Also  see  Draft ;  also  see  Negotiable  in- 
strument. 

Bill  of  lading.  A  written  acknowledgement  by  a  railroad, 
steamship  company  or  other  carrier  of  the  receipt  of  goods  for 
transportation. 

Bill  of  sale.  A  document  given  as  security  for  a  debt 
wherein  the  debtor  transfers  to  the  creditor  the  right  to  prop- 
erty specified  in  the  bill,  which  property  may  be  seized  and 
disposed  of  by  the  creditor  upon  the  non-fulfilment  of  the 
obligation  by  the  debtor. 

Billon.  An  alloy  of  gold  or  silver  with  a  base  metal,  as  cop- 
per or  tin  ;  specifically,  an  alloy  of  silver  with  a  large  propor- 
tion of  copper  in  coins,  tokens  or  medals. 

Bill  payable.  The  name  given  to  a  bill  of  exchange  (draft), 
promissory  note  or  other  written  engagement  to  pay  money 
by  the  person  who  must  pay  it. 

Bill  receivable,  A  written  evidence  of  debt  that  is  payable 
to  the  holder ;  a  promissory  note    or  an  acceptance  (a  bill  of 


SMITH'S  FINANCIAL  DICTIONARY.  69 


exchange  that  has  been  accepted)  is  in  the  hands  of  a  person 
to  whom  it  is  payable   a  bill  receivable. 

A  bill  receivable  that  is  included  under  the  head  commercial 
paper  is  a  promissory  note  that  has  been  received  for  goods 
sold  and  that  has  in  order  to  effect  its  discount  (sale)  been 
indorsed  by  the  party  who  received  it. 

Bill  rendered.  A  statement  presented  by  a  creditor  to  his 
debtor  of  an  account  or  of  money  due ;  a  paper  presented  set- 
ting forth  the  particulars  and  amount  of  a  debt. 

Also  see  Account  rendered. 

Bimetalism.  The  free  and  unlimited  coinage  (at  an  estab- 
lished ratio)  of  both  gold  and  silver  into  coins  of  full  debt- 
paying  power;  not  the  mere  use  of  the  double  standard,  but 
the  existence  of  mints  open  for  the  coinage  of  both  metals  on 
terms  of  defined  equality. 

Bimetallic  standard.  Exists  when  the  basis  of  values  is  gold 
and  silver  at  an  established  ratio. 

The  mere  possession  by  a  country  of  the  bimetallic  or  double 
standard  is  not  the  same  thing  as  bimetalism,  an  essential 
feature  of  which  is  a  mint  open  to  the  coinage  of  any  quantity 
of  either  gold  or  silver  that  may  be  brought  to  it. 

Bit,  A  name  applied  in  the  Southern  and  Western  states  to 
the  old  Spanish  real,  which  used  to  circulate  in  those  states 
and  was  worth    nominally    12  1-2  cents. 

Bituminous  coal.  Commonly  called  soft  coal ;  mineral  coal, 
containing  30  to  50  per  cent  of  volatile  matter;  designated  as 
coking  coal  when  used  for  the  production  of  coke,  furnace  coal 
when  suited  for  use  in  a  blast-furnace  and  cannel  coal  when 
rich  in  gas  with  low  heating  power.  Bituminous  coal  is  found 
in  many  parts  of  the  United  States. 

Black  book.  In  financial  vernacular  when  a  person  has  lost 
his  credit,  as  by  failure  to  meet  his  financial  obligations,  he  is 
said  to  be  in  the  black  book  or  on  the  black  list.  The  black 
book  or  black  list  is  a  private  book  kept  by  a  bank  or  other 
financial  institution  containing  (a  list  of)  the  names  of  dis- 
credited borrowers  of  money. 

Black  Friday.  Friday.  September  24,  1869.  At  that  time 
gold  was  subject  to  considerable  fluctuation  in  value  and  it  was 
bought  and  sold  the  same  as  stocks. 

Jay  Gould,  then  the  president  of  the  Erie  Railroad    and  a 


SMITH'S  FINANCIAL  DICTIONARY. 


daring  speculator,  conceived  the  idea  of  buying  up  all  the  gold 
in  the  market  and  compelling  those  who  had  sold  it  short  to 
buy  of  him  at  a  greatly  increased  price  when  their  contracts 
should  mature.  He  associated  others  with  him  in  the  scheme 
and  put  it  in  operation.  He  forced  the  price  up  from  133  to  162 
in  about  twenty  days.  The  high  price  was  reached  on  Black 
Friday.  The  greater  part  of  the  increase  in  price  was  accom- 
plished on  that  day  and  the  day  preceding. 

On  Black  Friday  the  Gold  Bank,  through  which  the  trans- 
actions in  the  Gold  Room  were  cleared,  failed  and  the  gov- 
erning committee  of  the  Gold  Room  at  once  ordered  a  suspen- 
sion of  dealings  in  gold  for  one  week.  More  than  half  the 
members  of  the  Gold  Room  failed.  The  corner  in  gold  col- 
lapsed and  the  price  of  gold  immediately  fell. 

The  attempt  of  Mr.  Gould  and  his  associates  to  corner  gold 
was  based  on  the  fact  that  the  United  States  Treasury  had  dis- 
continued the  sale  of  gold,  which  was  calculated  to  place  and 
maintain  a  premium  on  it.  Indeed,  the  purpose  of  discon- 
tinuing its  sale  was  to  establish,  not  a  moderate,  but  a  consid- 
erable premium  on  it.  The  balance  of  international  trade  at 
the  time  was  heavily  against  the  United  States  and  in  favor  of 
Europe.  It  was  thought  and  it  was  urged  by  exporters  and 
importers  of  products  and  manufactures  alike  that  a  high  pre- 
mium on  gold  would  force  the  exportation  of  United  States 
products,  which  would  serve  to  discharge  obligations  of  the 
United  States  to  Europe  and  thereby  obviate  the  necessity  of 
sending  gold  to  Europe. 

Mr.  Gould  and  his  associates  counted  on  a  continuance  of 
the  new  rule  of  the  Treasury  not  to  sell  gold,  but  when  the 
corner  was  in  eflfect  and  the  great  increase  in  the  premium  on 
gold  had  been  accomplished  by  the  speculative  coterie  in  it 
there  was  a  widespread  appeal  to  the  Secretary  of  the  Treasury 
to  resume  sales  of  gold.  The  appeal  was  acceded  to  and  the 
corner  in  gold  collapsed  with  the  disastrous  consequences 
already  recounted. 

There  are  two  Black  Fridays  in  British  financial  history. 
On  a  Friday  early  in  December,  1745,  London  heard  that  the 
young  pretender,  Charles  Edward  Louis  Philip  Cassimer 
Stuart,  was  at  Derby,  only  120  miles  from  London,  with  his 
invading  force.     A  panic  ensued    with  an  accompanying  run 


SMITH  S  FINANCIAL  DICTIONARY.  71 

on  the  Bank  of  England,  but  it  was  stopped  by  the  sending  of 
a  force  under  the  Duke  of  Cumberland  to  meet  Charles  Edward 
and  his  followers. 

The  second  Black  Friday  in  London  was  May  11,  1866, 
when  there  was  a  panic  with  a  run  on  the  banks  as  a  conse- 
quence of  the  announcement  late  in  the  afternoon  of  the  day 
before  of  the  failure  of  the  great  discount  house  of  Overend, 
Gurney  &  Co.,  Limited,  which  had  only  a  year  before  been 
converted  from  a  private  concern  into  a  joint-stock  company. 

Black  list.  In  financial  vernacular  when  a  person  has  lost 
his  credit,  as  by  failure  to  meet  his  financial  obligations,  he  is 
said  to  be  on  the  black  list  or  in  the  black  book.  The  black 
list  or  black  book  is  a  private  book  kept  by  a  bank  or  other 
financial  institution  containing  (a  list  of)  the  names  of  dis- 
credited borrowers  of  money. 

Bland  bill.  The  bill  introduced  in  the  House  of  Representa- 
tives by  Mr,  Bland  providing  for  the  coinage  of  silver  on  the 
same  terms  as  gold  (for  the  free  coinage  of  silver)  at  the  ratio 
of  16  to  I.  At  the  commercial  (market)  price  of  silver  the 
ratio  at  the  time  was  18  to  i. 

The  bill  was  amended  in  the  Senate  by  Mr.  Allison  and  be- 
came a  law  on  February  28,  1878,  by  being  passed  over  the  veto 
of  President  Hayes.  As  amended  it  provided  for  the  purchase 
by  the  government  of  not  less  than  $2,000,000  worth  nor  more 
than  $4,000,000  worth  of  silver  bullion  each  month  and  the 
coining  of  it  into  silver  dollars,  these  to  be  legal  tender.  The 
Bland  bill  thus  became  the  Bland-Allison  act.  It  was  super- 
seded by  the  Sherman  act,  which  see. 

Bland  dollar.  A  name  sometimes  applied  to  the  standard 
silver  dollar  issued  under  the  Bland-Allison  act.  For  addi- 
tional information  see  Bland  bill. 

Blank  certificate.  The  term  applied  to  a  certificate  of  stock 
or  a  registered  bond  signed  (assigned)  in  blank ;  see  Assigned 
in  blank. 

Blank  credit.  Permission  to  draw  up  to  a  given  amount 
upon  a  firm  or  individual. 

Blanket  mortgage.  A  colloquial  name  for  a  mortgage  cover- 
ing everything;  a  general  mortgage. 

Blank  indorsement.  A  blank  indorsement  on  a  check,  bill  of 
exchange  (draft),  promissory  note   or  other  negotiable  instru- 


72  SMITH'S  FINANCIAL  DICTIONARY. 


ment  or  paper  is  when  the  paper  is  not  transferred  specifically 
to  a  new  holder,  but  when  the  name  of  the  payee  (the  holder ; 
that  is,  the  owner  of  the  paper)  is  written  alone  (by  itself)  on 
the  back  of  the  paper.  Thus,  ownership  is  transferred  to  any 
one  who  ma}^  be  in  possession  of  the  paper. 

Blank  transfer.  An  English  term  which  is  equivalent  to 
assigned  in  blank,  or  to  use  the  commoner  expression,  signed 
in  blank.     For  additional  information  see  Assigned  in  blank. 

Blind  figure.  A  bookkeeping  and  accounting  term ;  a  figure 
so  carelessly  or  indistinctly  written  that  it  may  be  taken 
for  another  figure  as  a  2  for  a  7  or  a  3  for  an  8  or  a  7  for  a  9, 
etc. 

Blind  pool.  Said  when  several  persons  contribute  capital 
to  a  pool  (mutual  fund)  only  the  manager  of  which  knows  in 
what  way  the  money  is  to  be  used.  The  purpose  of  a  blind 
pool  is  to  insure  secrecy. 

A  speculative  blind  pool  is  not  uncommon.  The  operations 
of  a  blind  pool  in  the  stock  market,  for  instance,  may  be  con- 
fined to  a  single  stock  or  it  may  be  extended  to  several  stocks. 
There  may  be  a  blind  pool  in  a  scheme  of  almost  any  nature. 

Block.  The  term  applied  to  a  large  number  of  shares  of 
stock,  as  5,000  or  10,000  shares ;  or  a  large  amount  of  bonds,  as 
$500,000  or  $1,000,000. 

Blotter.     In  bookkeeping  the  blotter  is  the  first  record  book. 

Blue  list.  A  list  (shorter  than  the  red  list)  of  the  stocks 
most  actively  dealt  in  on  the  New  York  Stock  Exchange  print- 
ed on  blue  paper  daily.  The  high,  low  and  last  prices  are  given 
together  with  the  number  of  shares  of  each  stock  dealt  in. 

Blue  note.     This  is  a  term  sometimes  applied  to  the  note- 
given  when  a  loan  on  call  is  obtained.     The  note  is  so  called 
because  it  is  frequently  printed  on  blue  paper  to  make  it  easily 
distinguishable  from  a  note  given  for  a  time  loan,  which  is 
almost  invariably  printed  on  white  paper. 

Blue  pup  money.  The  slang  name  applied  to  the  notes  or 
circulating  medium  (substitute  for  money)  formerly  issued  by 
plank  road  companies — companies  which  constructed  and  main- 
tained plank  roads  and  collected  toll  from  persons  who  used 
the  roads  in  travel  or  trafific.  The  notes  so  issued  were  in 
small  denominations,  mostly  for  fractional  amounts,  and  were 
ostensibly  for  use  in  paying  toll,  but  they  freely  passed  current 


SMITH'S  FINANCIAL  DICTIONARY.  73 

as  money  in  the  sections  where  they  originated.  They  are 
said  to  have  first  been  issued  in  Indiana.  They  were  called 
blue  pup  money  to  distinguish  them  from  red  dog  money, 
which  name  was  given  to  notes  of  another  kind  and  of  larger 
denominations ;  see  Red  dog  money. 

BNK.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  bank. 

Board.  It  is  a  common  habit  for  members  of  the  New  York 
Stock  Exchange,  and  in  fact  of  any  exchange,  to  speak  of  the 
exchange  as  the  board.  The  expression  "on  the  board"  means 
on  the  exchange. 

The  name  may  have  been  and  very  likely  was  derived  from 
an  earlier  title  of  the  New  York  Stock  Exchange — "New 
York  Stock  and  Exchange  Board." 

The  largest  speculative  dealings  in  grain  and  provisions  in 
the  United  States  are  conducted  by  a  body  officially  designated 
as  a  board — the  Chicago  Board  of  Trade. 

The  term  board  is  also  applied  to  the  board  in  a  broker's 
office  on  which  quotations  are  posted. 

The  term  board  is  also  applied  to  the  printed  lists  of  trans- 
actions in  detail  on  the  New  York  Stock  Exchange ;  see  Stock 
lists. 

Board  of  directors.  The  governing  body  of  an  incorporated 
company. 

The  word  directorate  is  sometimes  used  in  place  of  the 
longer  term  board  of  directors ;  sometimes,  also,  the  word  di- 
rectory is  used  in  place  of  board  of  directors. 

For  additional  information  see  Director. 

Board  of  trade.  A  title  often  adopted  by  an  organization 
formed  to  promote  mercantile  or  commercial  interests. 

It  also  is  a  title  sometimes  bestowed  on  an  exchange  or  trad- 
ing organization,  as  the  Chicago  Board  of  Trade,  the  members 
of  which  conduct  speculative  operations  in  grain  and  pro- 
visions on  an  extensive  scale. 

The  British  Board  of  Trade  is  a  department  or  bureau  of 
the  government  which  compiles  and  publishes  returns  as  to 
exports  and  imports,  returns  as  to  railway  traffic,  and  labor 
statistics.  When  British  Board  of  Trade  returns  are  referred 
to  without  particularization  they  are  taken  as  meaning  the  ex- 
ports and  imports  of  the  Il'nited  Kingdom.     These  particular 


74  SMITH'S  FINANCIAL  DICTIONARY. 


figures  are  published  on  the  7th  of  each  month.  Railway 
trafiBc  returns  (gross)  are  published  in  the  first  half  of  every 
week.     Labor  statistics  are  published  monthly. 

Board  room.  The  name  by  which  the  trading  room  of  an 
exchange  often  is  designated. 

Boatload.  As  used  in  the  grain  trade  this  term  refers  to  a 
canal  boatload.  An  Erie  canal  boat  has  an  average  capacity 
of  8,000  bushels  of  grain.     Also  see  Cargo. 

Bob,  An  English  colloquialism  for  a  shilling,  equal  to  24.3 
cents. 

Bobtail  pool.  A  Wall  Street  colloquialism.  The  term  is 
applied  to  an  informal  pool  in  a  stock.  For  instance,  four  or 
five  speculators  may  agree  to  buy  (if  it  is  a  bull  pool)  1,000 
or  2,000  or  5,000  shares  each  of  a  certain  stock  in  expectation 
of  an  advance  in  the  price  and  to  stimulate  an  advance  in  the 
price  and  each  usually  is  alloAved  to  suit  his  pleasure  in  sell- 
ing his  stock. 

In  a  formal  pool  the  members  appoint  a  manager  who  buys 
the  stock  for  the  account  of  all  and  likewise  sells  the  stock  for 
the  account  of  all.  The  individual  members  have  no  hand  in 
either  buying  or  selling. 

There  are  bear  pools  as  well  as  bull  pools.  In  a  bear  pool 
the  stock  is  sold  short  in  expectation  of  and  for  the  purpose  of 
facilitating  a  decline  in  the  price.  When  the  price  has  de- 
clined the  stock  is  bought. 

Boerse.     The  German  spelling  of  bourse;  see  Bourse. 

Bona  fide.  In  good  faith.  For  instance,  a  bona  fide  bid  for 
a  stock  is  a  bid  in  good  faith. 

Bonanza.  A  colloquialism,  meaning  a  rich  mine  or  vein  or 
find  of  ore.  The  term  is  also  applied  to  a  highly  profitable 
investment  or  speculation. 

Bond.  A  certificate  of  obligation  to  pay  money  secured  by 
mortgage  or  otherwise.  A  bond  issued  by  a  corporation  (or 
by  a  municipality  or  government)  is  an. interest-bearing  debt 
certificate. 

The  securities  issued  by  a  government  are  generally  desig- 
nated as  bonds  instead  of  stock.  The  securities  issued  by  the 
United  States  government  are  designated  as  bonds,  although 
formerly  known  as  stock.  Some  of  the  securities  issued  by 
the  city  of  New  York  are  designated  as  stock;  but  municipali- 


SMlTirS  FINANCIAL  DICTIONARY.  75 


ties    as  a  rule    designate  their  securities  as  bonds  instead  of 
stock. 

A  coupon  bond  (as  distinguished  from  a  registered  coupon 
bond)  is  one  both  interest  and  principal  of  which  are  payable 
to  bearer.  A  registered  coupon  bond  is  one  which  bears  the 
name  of  the  owner  and  his  name  also  is  registered  (recorded) 
on  the  books  of  the  company  issuing  it,  but  the  interest  is 
payable  to  the  bearer — to  the  holder  of  the  coupon,  detachable 
from  the  bond,  which  calls  for  the  payment  of  an  instalment  of 
interest  when  it  has  become  due.  A  registered  bond  (not  reg- 
istered coupon  bond)  is  one  bearing  the  name  of  the  owner. 
The  name  of  the  owner  also  is  registered  (recorded)  on  the 
books  of  the  company  issuing  it  and  the  interest  payments  are 
made  by  checks  forwarded  to  the  address  of  the  owner. 

A  gold  bond  is  one  specifically  payable,  both  interest  and 
principal,  in  gold  coin  ;  a  currency  bond  is  one  payable,  both 
interest  and  principal,  in  any  kind  of  money  that  is  legal 
tender ;  a  guaranteed  bond  is  one  the  payment  of  the  interest 
and  principal  of  which  is  guaranteed  by  a  company  or  institu- 
tion other  than  the  one  which  issued  it  (sometimes  only  the 
payment  of  the  interest  is  guaranteed).  A  large  bond  is  a 
single  bond  for  $10,000 ;  a  small  bond  is  a  bond  for  less  than 
$500.  A  long  bond  is  a  bond  that  runs  for  many  years ;  a 
short  bond  is  a  bond  that  runs  for  a  few  years.  A  secured  or 
backed  bond  is  a  bond  that  is  secured  by  pledge  of  property; 
a  plain  bond  is  a  bond  that  is  not  secured  by  pledge  of  prop- 
erty (it  is  an  unsecured  debenture  bond  and  is  merely  a 
promise  to  pay — a  promissory  note). 

It  is  a  common  practise  to  designate  bonds  by  the  rates  of 
interest  they  bear,  as  3  i-2s,  4s  or  5s. 

Railroad  bonds  are  usually  described  as  prior-lien  bonds, 
first  mortgage  bonds,  general  (or  "blanket")  mortgage  bonds, 
consolidated  mortgage  bonds,  second  mortgage  bonds,  equip- 
ment bonds,  land  grant  bonds,  sinking  fund  bonds,  collateral 
trust  bonds,  adjustment  bonds,  debenture  bonds,  participating 
bonds,  income  bonds,  convertible  bonds. 

The  chief  features  of  these  bonds  are  as  follows :  Prior-lien 
bonds  are  a  lien  ahead  of  all  other  bonds,  but  ordinarily  cover 
or  represent  only  a  small  part  of  the  value  of  the  whole  prop- 
erty ;  first  mortgage  bonds  are  issued  under  a  mortgage  which 


76  SMITH'S  FINANCIAL  DICTIONARY. 

is  first  in  lien,  or  in  other  words,  takes  precedence  of  mortgages 
subsequently  created  (sometimes  there  is  a  lien — a  prior  lien — 
ahead  of  a  first  mortgage)  ;  general  (or  "blanket")  mortgage 
bonds  are  issued  under  a  mortgage  which  is  a  first  lien  on 
everything  not  already  mortgaged ;  consolidated  mortgage 
bonds  are  issued  under  a  mortgage  which  has  superseded  two 
or  more  other  mortgages;  second  mortgage  bonds  are  issued 
under  a  mortgage  which  is  a  second  lien  or  a  lien  after  the 
first  lien ;  equipment  bonds  are  secured  by  mortgage  on  equip- 
ment; land  grant  bonds  are  based  on  grants  of  land  and  are 
retired  by  the  proceeds  of  the  sales  of  land;  sinking  fund 
bonds  are  bonds  for  the  redemption  of  which  a  sinking  fund 
is  established ;  collateral  trust  bonds  are  secured  by  pledge  of 
collateral  (stocks  and  bonds)  ;  adjustment  bonds  are  as  a  rule 
issued  to  pay  for  improvements  and  generally  rank  as  second 
mortgage  bonds ;  debenture  bonds  are  promissory  notes  in  the 
form  of  bonds ;  participating  bonds  are  debt  certificates  which 
receive  interest  at  a  varying  rate  as  permitted  by  revenues ; 
income  bonds  receive  interest,  if  earned,  before  dividends  can 
be  paid  on  stock  of  the  company  issuing  them  (practically  pre- 
ferred stock)  ;  convertible  bonds  are  bonds  which  are  conver- 
tible into  (exchangeable  for)  stock. 

The  term  bond  also  applies  to  an  obligation  in  writing  and 
under  seal  in  which  a  person  binds  himself  to  pay  to  another 
a  certain  sum  of  money  at  a  specified  time. 

Also,  to  bond  means  to  put  under  pledge  or  under  forfeit  in 
a  penal  sum. 

Also  see  In  bond. 

Bond  broker.  One  who  makes  a  specialty  of  dealing  in 
bonds. 

Bond  call.  The  act  of  calling  off  at  an  exchange  or  trading 
place  the  list  of  bonds  dealt  in  there.  As  the  names  of  the 
bonds  are  called  the  buyers  and  sellers  make  their  bids  and 
offers. 

Bond  creditor.  A  creditor  whose  claim  is  secured  to  him  by 
a  bond. 

Bonded.  Secured  by  a  pledge  of  property  or  some  other 
form  of  guaranty. 

A  railroad  is  bonded  for,  say,  $50,000,000  when  its  property 
has  been  mortgaged  as  security  for  an  indebtedness  of  that 


SMITH'S  FINANCIAL  DICTIONARY.  77 

amount  and  bonds  have  been  issued  under  the  mortgage  to 
represent  the  indebtedness. 

Also  see  In  bond. 

Bonded  debt.  A  debt  to  represent  which  bonds  have  been 
issued. 

Bondholder.  One  holding  or  owning  bonds,  as  government 
bonds    or  railroad  bonds. 

Bond  of  indemnity.  A  written  instrument  guaranteeing 
protection  against  loss. 

Bond  power.  The  name  given  to  the  irrevocable  power  of 
attorney  used  in  assigning  or  transferring  title  to  a  registered 
bond. 

Bonds  borrowed  and  loaned.  The  practise  in  borrowing 
and  lending  bonds  is  the  same  as  in  borrowing  and  lending 
stocks.     For  information  see  Borrowing  and  lending  stocks. 

Bond  to  bearer.  English  term  for  a  coupon  bond — that  is,  a 
bond  not  registered  in  the  name  of  the  owner  on  the  books  of 
the  company  or  government  issuing  it,  but  transferable  like 
money  by  merely  passing  from  one  to  another,  the  interest 
payments  being  represented  by  coupons  which  are  detachable 
and  payable  to  bearer. 

Bonus.  A  premium  or  gratuity;  something  given  free  in 
addition  to  what  is  usual  or  stipulated. 

It  is  not  an  infrequent  practise  on  the  organization  of  a  stock 
company  to  give  to  purchasers  of  the  preferred  stock  as  a 
bonus  that  is.  without  charge,  a  certain  percentage  (perhaps 
an  equal  amount)  of  common  stock.  Sometimes  when  a  com- 
pany issues  bonds  it  gives  to  purchasers  a  bonus  in  stock. 

In  Great  Britain  when  an  extra  dividend  or  dividend  in  ex- 
cess of  the  regular  dividend  is  declared  it  is  called  a  bonus. 

Book  debt.  An  overdue  account;  usually  rated  as  good, 
doubtful   or  bad. 

Booked.  Entered  in  a  book  ;  recorded.  When,  for  instance, 
an  order  is  said  to  have  been  booked  it  is  meant  that  it  has  been 
recorded. 

Book  of  account.  A  book  in  which  entries  of  commercial 
transactions  are  kept. 

Books  close.     Relates  to  transfer  books  for  stocks. 

On  an  advertised  day  prior  to  the  payment  of  a  dividend  on 
a  stock  the  transfer  books  close  and  the  stockholders  then  of 


78  SMITH'S  FINANCIAL  DICTIONARY. 


record  receive  the  dividend.     On  and  after  the  day  the  books 
close  the  stock  sells  ex-dividend    or  without  the  dividend. 

The  transfer  books  also  are  closed  on  an  advertised  day 
prior  to  an  election  or  other  stockholders'  meeting  and  only 
stockholders  then  of  record  can  vote  at  that  election  or  meet- 


ing. 


A  contract  in  a  stock  falling  due  during  the  regular  closing 
of  the  transfer  books  of  the  company  is  settled  at  maturity  by 
the  delivery  of  a  certificate  and  power  of  attorney;  on  a  con- 
tract which  is  at  the  option  of  the  buyer  or  of  the  seller  notice 
for  settlement  may  be  given  as  if  the  books  were  open.  In  case 
the  books  are  closed  for  a  dividend  the  party  entitled  to  it  re- 
ceives a  due  bill  for  it. 

Also  see  Books  open. 

Books  open.  Only  when  the  transfer  books  of  a  company 
are  open  can  the  ownership  of  securities  be  changed  in  the 
record ;  in  other  words,  in  the  interval  between  the  closing  and 
the  opening  of  books  stocks  cannot  be  transferred  on  the  books. 

Also  see  Books  close. 

Book  value.  The  book  value  of  a  stock  is  based  on  the  net 
profits  or  deficit  of  the  corporation  which  issued  it.  It  is  a 
frequent  practise  in  quoting  bank  stocks  to  give  book  values 
as  well  as  market  prices. 

Illustration  :  If  a  bank  has  net  profits  (accumulated  surplus 
and  undivided  profits)  equal  to  75  per  cent  on  the  stock  then 
the  book  value  of  the  stock  is  the  original  amount  of  the  stock, 
100  per  cent,  plus  the  equivalent  in  net  profits,  75  per  cent,  or 
altogether  175.  On  the  other  hand,  if  the  bank  shows  no  net 
profits,  but  instead  shows  a  deficiency  equal  to,  say,  5  per 
cent  on  the  stock  the  book  value  of  the  stock  is  only  95. 

The  book  value  of  the  stock  of  a  railroad  or  manufacturing 
company  is  ascertained  in  the  same  manner  as  the  book  value 
of  the  stock  of  a  bank. 

Boom.  A  colloquialism,  meaning  a  rush  of  business  accom- 
panied by  a  quick  inflation  of  values. 

Boot  money.  Money  given  as  an  extra  compensation  by 
one  of  the  parties  in  an  exchange  of  property ;  it  is  said  in  such 
a  case  that  so  much  was  given  to  boot,  meaning  into  the 
bargain. 

Borrowed  stock.     Stock  the  use  of  which  is  borrowed  for  the 


SMITH'S  FINANCIAL  DICTIONARY.  79 

purpose  of  making  delivery  on  a  short  contract.  For  informa- 
tion see  Borrowing  and  lending  stocks. 

Borrowing  and  lending  stocks.  When  a  speculator  sells 
stock  which  he  does  not  possess  (when  he  sells  it  short)  he 
(or  what  is  the  same  thing,  the  broker  who  acts  for  him) 
has  to  borrow  the  stock  to  make  delivery  to  the  purchaser. 
The  one  who  possesses  stock  (who  is  long  of  it)  is  in  ordi- 
nary circumstances  as  anxious  to  lend  it  as  the  one  who  has 
sold  it  short  is  anxious  to  borrow  it. 

The  lender  of  stock  receives  from  the  borrower  the  market 
value  of  it  in  money,  but  except  when  the  stock  is  lending  flat 
(without  interest)  or  at  a  premium  the  lender  of  the  stock 
pays  to  the  borrower  of  it  interest  on  the  money  paid  for  the 
stock  by  the  borrower.  The  rate  of  interest  is  determined  by 
bid  and  offer. 

On  the  New  York  Stock  Exchange  brokers  who  have  stocks 
to  borrow  and  brokers  who  have  stocks  to  lend  assemble  im- 
mediately after  the  close  of  business  on  the  exchange  and 
those  who  need  stocks  borrow  amounts  necessary  to  make 
deliveries  the  next  day.  Those  who  neglect  to  borrow  at  this 
time  must  do  so  the  next  morning  or  some  time  in  the  day 
before  the  delivery  hour,  2.15  p.  m.  There  is  no  loan  crowd 
in  the  morning,  but  borrowers  seek  lenders  at  the  posts  on  the 
floor  of  the  exchange  around  which  the  particular  stocks  that 
they  require  are  dealt  in. 

The  same  rules  govern  the  receipt  and  delivery  of  stocks 
borrowed  and  loaned  as  govern  stocks  bought  and  sold.  In 
returning  borrowed  stock  the  borrower  must  notify  the  lender 
before  i  o'clock  on  the  day  of  delivery ;  the  lender  in  calling  or 
demanding  the  return  of  stock  must  do  likewise. 

When  a  stock  is  loaned  flat  the  owner  is  relieved  from  the 
cost  of  carrying  the  stock.  If  loaned  at  a  premium  he  is  still 
better  off,  for  the  premium  is  so  much  gain.  When  a  stock  is 
loaned  at  a  premium  the  premium  applies  in  the  absence  of  a 
renewal  of  the  loan  only  to  the  day  on  which  the  stock  is 
loaned. 

If  a  stock  that  has  been  borrowed  advances  in  market  price 
the  lender  may  require  the  borrower  to  pay  to  him  the  differ- 
ence between  the  price  at  which  the  stock  was  loaned  and  the 
new  higher  price.     On  the  other  hand,  if  the  stock  declines  in 


8o  SMITH'S  FINANCIAL  DICTIONARY. 

price  the  borrower  may  require  the  lender  of  the  stock  to 
return  to  him  the  difference  between  the  price  at  which  the 
stock  was  borrowed  and  the  new  lower  price.  These  differ- 
ences are  called  market  differences. 

When  a  corner  is  being  worked  up  in  a  stock  it  is  the  prac- 
tise of  those  engineering  it  freely  to  loan  the  stock  in  order  to 
encourage  the  creation  of  'a  short  interest  in  it.  When  this 
short  interest  has  become  large  enough,  or  in  other  words, 
when  the  stock  has  become  sufficiently  oversold  a  demand  for 
the  return  of  the  stock  brings  the  corner  to  a  culmination. 

An  apparent  borrowing  demand  for  stocks  is  sometimes 
created  by  the  efforts  of  money  lenders  to  obtain  higher  in- 
terest on  their  money  than  is  obtainable  in  lending  it  in  the 
money  market.  If  the  lending  rate  for  a  particular  stock  is, 
s.iy,  6  per  cent  when  money  is  lending  at  4  1-2  per  cent  in  the 
money  market  the  money  lenders  will  borrow  the  stock  in 
order  to  obtain  the  extra  interest. 

AVhen  a  seller  of  long  stock  (stock  actually  owned)  desires 
to  create  the  impression  that  he  is  selling  short  stock  (stock 
not  owned  or  possessed)  he  has  his  broker  borrow  stock  for 
delivery  to  purchasers.  Then  when  he  has  completed  his 
sales  he  delivers  his  own  stock  to  the  ones  from  whom  his 
broker  borrowed. 

Also,  when  a  seller  of  stock  desires  to  conceal  his  identity 
he  has  his  stock  transferred  or  made  out  in  the  name  of  his 
broker  or  a  clerk  or  some  other  person  previous  to  its  de- 
livery to  purchasers. 

Arbitrage  dealers  (see  Arbitrage)  often  sell  stock  held 
abroad  which  will  not  be  received  for  some  time.  They  bor- 
row for  delivery  to  purchasers  and  when  their  own  stock  ar- 
rives they  make  return  to  the  ones  from  whom  they  borrowed. 

Corporations  intending  to  issue  new  stock  have  been  known 
to  sell  the  stock  in  advance  of  its  issuance  and  to  borrow  to 
make  delivery  to  purchasers.  Then  when  the  new  stock  was 
issued  it  was  used  to  make  return  to  the  ones  from  whom  stock 
had  been  borrowed. 

Bottomry.  A  maritime  contract  whereby  the  owner  of  a 
vessel  (or  its  master  if  in  a  foreign  port)  borrows  money  at 
maritime  interest  to  enable  him  to  make  or  complete  a  voyage, 


SMITH'S  FINANCIAL  DICTIONARY.  8i 

pledging  or  mortgaging  the  vessel  as  security  without  making 
himself  personally  liable  in  case  of  the  loss  of  the  vessel. 

Bought  back.     See  Buying  back. 

Bought  in.     See  Buying  in. 

Bought  note.  A  memorandum  of  purchase  delivered  by  a 
merchandise  broker  to  the  buyer  of  goods  for  whom  the 
broker  acted. 

Bought  outright.     See   Buying  outright. 

Bounty.  A  grant  or  allowance  from  a  state  or  government 
for  the  encouragement  of  a  trade  or  industry  is  a  bounty. 

Bourse.  The  name  for  a  stock  exchange  on  the  Continent 
of  Europe. 

The  Paris  Bourse  may  be  visited  by  all  and  merchants, 
manufacturers  and  others  transact  business  there  at  certain 
hours  of  the  day.  There  are,  however,  only  seventy  official 
members  or  agents  de  change  who  deal  in  stocks  and  bonds. 
They  are  approved  by  the  Minister  of  Finance.  They  stand 
in  a  small  enclosure  in  the  centre  of  the  bourse  called  the  par- 
quet.    For  additional  information  see  Paris  Bourse. 

Tlie  Berlin  Bourse  is  under  government  supervision.  The 
sworn  agents  de  change  on  the  bourse  deal  principally  in  gov- 
ernment securities,  while  the  ordinary  brokers  or  agents  de 
change  deal  in  railroad,  mining  and  general  stocks.  Bank- 
ers, brokers  and  merchants  are  admitted  to  the  bourse  on  pay- 
ment of  an  annual    but  varying  subscription. 

The  Vienna  Bourse  is  under  control  of  the  government  and 
business  is  carried  on  only  by  sworn  agents  de  change,  who  are 
nominated  by  the  government  after  paying  an  annual  sub- 
scription and  a  fixed  sum  as  an  entrance  fee. 

The  German  spelling  of  bourse  is  boerse. 

Boxing  day.  A  legal  holiday  in  Great  Britain  (excepting 
Scotland)  and  Ireland  ;  the  first  week  day  after  Christmas,  on 
which  Christmas  boxes  are  given  to  errand-boys,  letter-car- 
riers, etc. 

Bradstreet's.     The  name  of  one  of  the  commercial  agencies. 

Branch  bank.  A  national  bank — that  is,  a  bank  organized 
inider  the  National  bank  act — is  not  permitted  to  establish 
branches.  To  some  extent,  however,  the  same  end  is  accom- 
plished by  acquiring  control  of  other  banks.  These  controlled 
banks  serve  as   and  practically  are  branches  of  the  controlling 


8^  SMITH'S  FINANCIAL  DICITONARY. 


or  main  bank.  Their  funds  beyond  the  percentage  of  their 
deposits  that  they  are  required  by  law  to  hold  in  cash  as  a 
reserve    are  deposited  with  the  main  bank. 

In  the  banking  systems  of  most  countries  the  requirement 
as  to  bank  capital  is  much  higher  than  in  the  United  States, 
but  the  banks  are  allowed  to  establish  branches,  thus  being 
able  to  do  business  in  many  places,  the  branch  banks  answer- 
ing the  purpose  for  which  banks  with  small  capital  are  organ- 
ized in  this  country.  There  are  many  advocates  of  the  branch 
bank  system  who  would  have  it  adopted  in  the  national  bank- 
ing system  of  this  country,  but  popular  sentiment  has  re- 
mained strongly  opposed  to  such  a  change. 

The  advantages  of  branch  banks  may  be  illustrated  by  the 
case  of-  the  Bank  of  Montreal  in  Canada,  which  receives  de- 
posits, for  instance,  at  its  branches  in  the  farming  regions  of 
Nova  Scotia  where  the  demand  for  money  is  slight  and  lends 
the  funds  at  its  branches  in  British  Columbia  where  business 
is  active  and  the  demand  for  money  large.  The  business  inac- 
tivity of  the  Nova  Scotia  regions  referred  to  would  render 
small  local  banks  unprofitable,  so  that  accummulated  savings 
would  remain  scattered  in  individual  hands,  earning  no  interest 
and  performing  no  useful  economic  function.  On  the  other 
hand,  British  Columbia  would  ofifer  no  possibility  for  the  estab- 
lishment of  large  local  banks  that  could  supply  the  funds 
needed  for  business  purposes  for  the  reason  that  there  is  no 
accumulated  capital  to  supply  the  banks  with  deposits  in  suffi- 
cient amount. 

Against  these  considerations  it  is  urged  that  the  system  of 
large  banks  with  many  branches  tends  toward  monopoly  and 
the  restraint  of  individual  enterprise  in  banking  and  that  the 
system  of  many  small  banks  operated  under  the  National 
baiik  act  has  worked  so  successfully  in  this  country  that  it 
should  not  be  interfered  with. 

Branch  line.  y\  line  of  railroad  that  is  tributary  to  the  main 
line. 

Breadstuffs.  Under  this  head  in  the  country's  exports  come 
grain,  meal,  bran,  middlings,  mill  feed,  dried  grains,  malt 
sprouts,  flour,  bread    and  biscuits. 

Break.  An  abrupt  fall  in  prices,  as  in  stocks  or  in  grain, 
cotton,  coffee,  etc. 


SMITH'S  FINANCIAL  DICTIONARY.  83 

Breaking  even.  A  colloquialism ;  when  a  trade  has  been 
concluded  without  profit  or  loss  the  speculator  is  said  to  have 
broken  even. 

Brocage.  (Obsolete).  The  trade  or  occupation  of  a  broker 
or  the  commission  paid  to  him  for  his  service;  now  called 
brokerage. 

Broken  lot.  A  term  sometimes  used  in  dealings  in  bonds, 
meaning  less  than  $10,000;  in  stocks  the  term  used  is  fractional 
lot  or  odd  lot  (less  than  100  shares). 

Broker.  One  who  executes  orders  for  the  purchase  or  sale 
of  stocks   or  other  property ;  an  agent. 

A  broker  cannot  bind  his  customer  without  his  express 
agreement  by  transacting  business  committed  to  him  in  any 
other  than  the  ordinary  and  customary  method. 

On  the  London  Stock  Exchange  the  broker  is  merely  the 
middleman  between  the  public  and  the  jobbers.  He  acts  as 
agent  for  the  outside  public,  while  a  jobber  buys  and  sells 
from  or  to  the  broker  and  covers  himself  by  a  purchase  or  sale 
wirh  another  jobber    or  broker. 

About  one-third  of  the  entire  membership  of  the  London 
Stoclc  Exchange  consists  of  jobbers ;  one-third  of  brokers,  and 
one-third  of  clerks.  No  member  can  act  in  the  double  capacity 
of  jobber  and  broker  and  there  can  be  no  partnership  between 
the  two  classes  nor  with  any  person  who  is  not  a  member  of 
the  exchange. 

Authorized  clerks,  so-called,  are  admitted  to  the  exchange, 
with  power  to  deal  and  bind  their  principals.  Unauthorized 
clerks,  so-called,  also  are  admitted,  but  have  authority  only  to 
assist  their  employers  by  checking  bargains  and  carrying  out 
the  routine  work  of  the  settlement. 

A  person  may  be  a  member  of  the  exchange  and  not  be  a 
shareholder.  To  become  a  shareholder  one  must  be  a  member 
of  the  exchange,  although  this  was  not  formerly  the  case. 

An  ?gent  de  change  (member  of  the  bourse)  in  Paris  is  for- 
bidden to  trade  on  his  own  account. 

Brokerage.  Buying  and  selling  for  others.  The  fee  or  com- 
mission charged  for  transacting  such  business  is  also  called 
brokerage. 

Brokers'  market.  When  the  large  operators  and  the  outside 
public   are   not  engaged   in   speculation   and   the   brokers   are 


84  SMITH'S  FINANCIAL  DICTIONARY. 


trading  for  their  own  account  it  is  said  to  be  a  brokers'  market. 

"B"  stock.  This  is  the  English  designation  for  preferred 
ordinary  (common)  stock.  When  for  dividend  purposes  the 
ordinary  stock  of  a,  company  has  been  divided  into  two  parts 
called  preferred  or  "B"  stock  and  deferred  or  "A"  stock  the 
dividend  on  the  A  stock  is  deferred  until  a  fixed  amount  has 
been  paid  on  the  B  stock. 

This  B  or  peferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called  pre- 
ferred stock  is  in  Great  Britain  called  preference  stock  and 
preference  stock  in  Great  Britain  may  be  divided  into  two 
or  more  classes  called  first  preference,  second  preference,  etc., 
just  as  preferred  stock  in  the  United  States  may  be  divided  into 
two  or  more  classes  called  first  preferred,  second  preferred, 
etc.  When,  however,  there  is  but  one  class  of  preference  stock 
ahead  of  an  ordinary  stock  in  Great  Britain  the  B  or  preferred 
stock  is  equivalent  to  second  preferred  stock  in  the  United 
States. 

The  letter  B  is  also  used  to  distinguish  one  stock  from 
another  without  the  connotation  of  "preferred."  Costa  Rica 
B  bonds  and  Mexican  National  Railroad  B  bonds  are  examples 
of  this  use. 

Bubble.  A  scheme  which  is  illusory  is  said  to  be  a  bubble. 
The  term  bubble  also  is  sometimes  applied  to  a  fraudulent 
scheme. 

For  accounts  of  two  "bubbles"  famous  in  financial  history 
see  Mississippi  Company  and  South  Sea  bubble. 

Bubble  act.  An  act  of  the  British  Parliament  passed  in  1720 
to  prevent  fraudulent  speculative  schemes ;  repealed  in  1825. 

Bucketing.  As  distinguished  from  the  manner  in  which  a 
bucket  shop  operates  (see  Bucket  shop)  bucketing  of  stocks 
consists  in  sales  by  a  broker  (for  his  own  account  and  risk) 
against  customers'  purchases  or  purchases  by  the  broker 
against  customers'  sales. 

Such  a  proceeding  if  not  illegitimate  is  at  least  considered 
irregular.  The  purpose  may  be  to  avoid  the  employment  of 
money  in  carrying  (holding)  stocks,  but  more  often  the  pur- 
pose of  the  broker  is  to  speculate  against  his  customers — or,  in 
speculative  vernacular,  to  take  the  other  end  or  other  side  of 


SMITHS  I'INANCIAL  DICTIONARY.  83 

the  customers'  trades.  In  either  case  die  broker  wins  if  his 
customers  lose  or  he  loses  if  his  customers  win. 

As  an  example  of  bucketing,  if  a  broker's  customer  buys  100 
shares  of  stock  at,  say,  100  the  broker  sells  100  shares  at 
the  same  price.  A  cross  trade  is  thus  made  by  the  broker ; 
the  transactions  balance  and  the  broker  has  not  to  pay  out  and 
lock  up  for  an  indefinite  period  the  money  representing  the 
cost  of  the  stock  purchased  for  the  customer.  If  the  stock 
goes  down  to  98  and  the  customer  sells  while  the  broker  buys 
the  transactions  again  balance  and  the  customer  loses  2  per 
cent  while  the  broker  gains  2  per  cent.  On  the  other  hand,  if 
the  stock  goes  up  to  102  and  the  customer  sells  while  the 
broker  buys  the  customer  makes  2  per  cent  while  the  broker 
loses  2  per  cent.  The  broker,  however,  has  reduced  his  loss  by 
the  extent  of  the  commission  received  from  his  customer.  If 
the  commission  is  1-8  each  way — 1-8  per  cent  for  buying  and 
1-8  per  cent  for  selling — his  net  loss  is  i  3-4  per  cent.  If  the 
customer  loses  and  the  broker  wins,  as  in  the  first  illustration, 
the  broker's  gain  is  really  21-4  per  cent  instead  of  2  per  cent 
for  the  reason  that  his  commission  is  added  to  his  gain  in  the 
same  way  that  in  the  second  illustration  it  is  subtracted 
from  his  loss. 

It  may  be  that  some  customers  of  a  broker  have  bought 
while  others  have  sold  a  stock.  If  more  has  been  bought  than 
has  been  sold  the  broker  will  sell  enough  to  efifect  a  balance 
or  if  more  has  been  sold  than  has  been  bought  the  broker  will 
buy  enough  to  effect  a  balance. 

In  bucketing  there  is  always  a  percentage  represented  by 
the  commission  (and  augmented  by  interest  charged  against 
the  broker's  customers)  in  favor  of  the  broker  as  against  the 
customers,  so  that  the  broker  profits  by  bucketing  if  he  loses 
on  half  the  transactions  while  his  customers  lose  on  the  other 
half. 

Bucket  shop.  A  place  where  bets  are  made  on  regular  ex- 
change quotations. 

No  actual  transactions  take  place.  "Margin"  (a  bet)  is  put 
up  by  the  "customer"  and  a  commission  is  charged  for  "buy- 
ing" and  "selling"  the  same  as  on  an  exchange.  When  the 
quotations  show  a  profit  to  the  "customer"  (or  bettor)  he  is 
privileged  to  demand  the  profit;  when  the  limit  of  the  "cus- 


86  SMITH'S  FINANCIAL  DICTIONARY. 

tomer's"  margin  (from  which  has  been  deducted  the  commis- 
sion for  both  "buying"  and  '.'selling")  has  been  reached  the 
"customer"  has  lost  his  bet  and  the  transaction  is  closed. 

Budget.  English ;  an  estimate  of  (statement  of  probable) 
revenues  and  expenditures  by  the  government  in  the  ensuing 
year,  with  financial  proposals  in  connection  therewith,  such  as 
measures  for  meeting  a  deficiency  or  measures  for  disposing 
of  a  surplus. 

Building  and  loan  association.  A  cooperative  society  for  the 
saving  and  accumulation  of  money,  the  building  of  houses  and 
the  loaning  of  money,  its  operations  being  restricted  to  its 
own  members. 

The  banking  law  of  the  state  of  New  York  defines  such  a 
building  and  loan  association  as  follows :  "A  corporation 
formed  for  the  purpose  of  accumulating  a  fund  for  the  pur- 
chase of  real  property,  the  erection  of  buildings,  or  the  making 
of  other  improvements  on  lands,  or  to  pay  off  encumbrances 
thereon,  or  to  aid  its  members  in  acquiring  real  estate,  mak- 
ing improvements  thereon  or  removing  encumbrances  there- 
from, or  of  accumulating  a  fund  to  be  returned  to  its  members 
in  specified  cases." 

Bulge.  A  term  used  in  speculation  in  comrnodities,  particu- 
larly in  grain ;  means  a  quick  advance  in  price. 

Bull.  A  speculator  who  works  to  secure  or  who  believes 
in  higher  prices ;  one  who  buys  stocks,  grain,  cotton  or  any 
other  speculative  commodity  in  the  expectation  of  selling  it 
at  a  higher  price. 

A  speculator  may  be  a  bull  ostensibly  but  not  in  fact.  For 
instance,  he  may  desire  to  acquire  a  short  interest  in  a  stock, 
but  to  do  so  to  advantage  he  first  advances  the  price  by  wash 
orders  (see  Washing)  or  other  devices.  He  actually  sells  the 
stock  short  at  the  high  price  and  if  the  stock  then  declines 
below  the  original  price  the  speculator  increases  his  profit  to 
the  extent  of  the  advance  effected  by  him  preliminary  to  the 
making  of  his  actual  sales. 

The  French  for  bull  is  haussier. 

Bull  account.  London  Stock  Exchange  term ;  means  the 
interest  in  the  market  which  has  bought  stocks  and  is  holding 
them  to  sell  when  they  have  risen  in  price.     The  phrase  also 


SMITH'S  FINANCIAL  DICTIONARY.  87 


denotes   the  volume  of  commitments  open   on  the  bull   side. 
For  additional  information  see  Account,  The. 

The  corresponding  phrase  on  the  New  York  Stock  Exchange 
is  long  interest. 

Bull  campaign.  A  systematic,  sustained  effort  to  advance 
prices  of  stocks  or  commodities  (grain,  cotton,  coffee,  etc.). 

Bulling  the  market.  Working  to  advance  prices,  as  of 
stocks,  grain,  cotton    or  coffee,  etc. 

BulHon.  Gold  or  silver  in  ingots;  also  uncurrent  coin,  such 
as  old  or  foreign  coins  in  mass  intended  for  recoinage ;  or  gold 
or  silver  coined  but  considered  simply  with  reference  to  its 
commercial  value  as  raw  material. 

Por  particular  information  as  to  silver  bullion  see  Silver 
bullion. 

Bullion  note.  Another  name  for  Treasury  note ;  see  Treas- 
ury note. 

Bullion  point.  Same  as  gold  point  or  specie  point ;  see  Gold 
point. 

Bullion  value.  The  commercial  value.  In  the  case  of  coins 
the  bullion  value  is  the  commercial  or  market  value  of  the 
metal  they  contain. 

Bull  of  stocks.  London  Stock  Exchange  term  for  what  on 
the  New  York  Exchange  is  called  long  of  stocks ;  it  means  one 
who  has  bought  stocks  in  expectation  of  selling  them  at  a 
higher  price  than  he  paid  for  them. 

Bull  ring.  A  colloquial  name  applied  to  a  circular  or  ellip- 
tical railing  of  heavy  metal  on  the  floor  of  an  exchange  or 
board  (usually  where  dealings  in  grain,  cotton  or  coffee,  etc., 
are  conducted.)  Around  (outside)  this  railing  transactions 
are  effected. 

Bumper  crop.  A  colloquial  name  for  a  bountiful  or  very 
large  crop. 

Bumper  crops  of  wheat,  corn  and  cotton  are  important  for 
the  reason,  for  one  thing,  that  they  create  tonnage  for  the  rail- 
roads that  depend  largely  for  their  earnings  on  these  crops 
and,  for  another  thing,  because  they  constitute  a  good  part  of 
the  country's  exports.  Wheat  is  exported  largely  in  the  kernel 
and  in  the  form  of  flour.  Corn  is  exported  in  the  kernel  and 
as  meal   and  also  in  the  form  of  provisions,  being  used  exten- 


88  SMITHS  FINANCIAL  DICTIONARY. 


sively  as  feed  for  hogs  from  which  are  derived  pork,  lard,  hams, 
bacon,  etc.     Cotton  is  exported  heavily  in  its  raw  state. 

Bunco  game.     A  term  applied  to  any  swindling  operation. 

The  term  was  originally  applied  to  the  pretended  sale  of 
counterfeit  money  and  the  delivery  to  the  buyer  of  a  package 
containing  sawdust  or  some  other  worthless  article,  as  paper. 
This  particular  form  of  swindling  is  also  known  as  the  sawdust 
game. 

Bushel.  A  bushel  by  the  usual  standard  contains  in 
pounds :  Barley  48,  beans  60,  buckwheat  42,  clover  seed  60, 
corn  56,  corn  in  ear  68,  corn  meal  50,  flaxseed  56,  hempseed  44, 
oats  32,  onions  60,  peas  60,  potatoes  60,  rye  56,  salt  56,  timothy 
seed  45,  wheat  60,  wheat  bran  20. 

Business.  The  term  business  applies  to  something  con- 
ducted for  profit,  as  banking,  commerce,  manufacturing,  mer- 
chandising, brokerage,  etc.  It  is,  however,  loosely  used  in  the 
sense  of  profession,  calling   and  employment. 

Business  hours.  Banking  hours  are  from  10  a.  m.  to  3  p.  m. ; 
on  Saturday  from  10  a.  m.  to  12  noon.  On  the  New  York 
Stock  Exchange  the  hours  of  business  are  the  same. 

The  hours  of  business  on  the  London  Stock  Exchange  are 
from  II  a.  m.  to  4  p.  m. ;  on  Saturday  from  11  a.  m.  to  1.30  p.  m. 

Business  paper.  Another  name  for  commercial  paper ;  see 
Commercial  paper. 

Buy.  To  acquire  in  exchange  for  money  or  other  consid- 
eration. 

Buyer  four  or  ten,  twenty,  thirty  or  sixty,  etc.  Delivery  of 
stock  so  bought  may  be  demanded  by  the  buyer  on  any  day 
within  the  number  of  days  specified  on  one  day's  notice  to  the 
seller.  The  buyer  must  in  any  event  receive  and  pay  for  the 
stock  on  the  final  day. 

The  buyer  must,  unless  the  contract  is  flat  (without  inter- 
est), pay  to  the  seller  interest  at  the  legal  rate  on  the  price 
up  to  the  day  of  delivery.  The  amount  of  a  dividend  becoming 
due  on  the  stock  during  the  pendency  of  the  contract  belongs 
to  the  buyer. 

No  contract  on  buyer's  (or  seller's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  mto  on 
the  New  York  Stock  Exchange. 

Buyer's   option.     Tn    stocks   bought   on   buyer's   option   the 


SMITH'S  FINANCIAL  DICTIONARY.  89 


buyer  may  demand  delivery  of  the  stock  on  any  day  within  the 
time  specified  on  one  day's  notice  to  the  seller.  The  buyer, 
unless  the  contract  is  flat  (without  interest),  pays  the  seller 
interest  at  the  legal  rate  on  the  price  of  the  stock  up  to  the  day 
of  delivery.  The  amount  of  a  dividend  becoming  due  during 
the  pendency  of  the  contract  is  payable  by  the  seller  to  the 
buyer. 

No  contract  on  buyer's  (or  seller's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  into  on 
the  New  York  Stock  Exchange. 

Buyers  over.  London  Stock  Exchange  term,  meaning  that 
there  are  buyers  at  1-32  of  a  pound  over  a  figure  or  fraction. 
Over  99  is  99  1-32 ;  over  1-2  is  17-32. 

Buyer  the  year.  A  contract  which  gives  the  seller  the  right 
to  call  for  the  delivery  of  the  property  at  any  time  within  the 
year. 

No  contract  on  buyer's  (or  seller's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  into 
on  tlie  New  York  Stock  Exchange. 

Buying  a  bull.  London  Stock  Exchange  term,  meanmg 
buying  in  expectation  of  an  advance  in  price.  The  term  means 
the  same  as  the  New  York  Stock  Exchange  term  "buying  long 
stock,"  as  distinguished  from  buying  back  stock  that  has  been 
sold  short. 

Buying  and  selling  dividends.  Prohibited  on  exchanges  be- 
cause it  is  calculated  unduly  to  influence  the  prices  of  the 
stocks  concerned. 

Buying  and  selling  dividends  in  advance  of  their  declaration 
is,  however,  a  common  practise.  A  speculator  may  buy  the 
forthcoming  dividend  on  1,000  shares  of  a  certain  stock  (as  to 
the  size  of  which  there  is  doubt)  for,  say,  i  1-4  per  cent.  If 
the  dividend  is  i  1-2  per  cent  the  buyer  receives  from  the  seller 
the  difference,  1-4  per  cent;  if  the  dividend  is  i  per  cent  the 
buyer  pays  to  the  seller  the  difference,  1-4  per  cent,  which  on 
1,000  shares  is  $250. 

Buying  back.  Buying  back  is  a  term  used  when  a  specula- 
tor who  is  short  of  a  stock  covers — when  he  buys  a  stock  which 
be  had  previously  sold  without  having  owned  it. 

Buying  for  investment.     See  Investment  securities. 


90  SMITH'S  FINANCIAL  DICTIONARY. 

Buying  in.  The  act  of  purchasing  stock  to  enable  the  return 
of  stock  that  has  been  borrowed. 

The  term  also  applies  to  buying  under  the  rule ;  see  Under 
the  rule. 

The  term  buying  in  also  applies  when  property  at  public 
vendue  (auction)  is  bought  by  parties  in  interest  because  a 
high  enough  price  has  not  been  offered  for  it. 

The  term  buying  in  applies  when  at  a  foreclosure  sale  the 
property  is  bought  for  parties  in  interest.  In  the  sale  at  fore- 
closure of  a  railroad  the  road  may  be  and  generally  is  bought 
in  the  interest  of  its  security  holders. 

On  the  London  Stock  Exchange  when  the  seller  of  a  security 
does  not  deliver  it  by  the  date  when  it  is  due  the  buyer  in- 
structs the  official  broker  to  "buy  it  in" — that  is,  to  make  a 
fresh  purchase  for  cash  by  bidding  for  the  security  in  the  mar- 
ket. The  difference  in  price,  if  any,  and  the  official  broker's 
commission  are  paid  by  the  original  seller. 

Buying  outright.  Buying  and  paying  in  full  for  stocks.  See 
For  cash. 

Buying  rate.  In  dealings  in  exchange  the  buying  rate  is  the 
rate  at  which  exchange  is  bought  by  a  dealer  in  it. 

By-bidder.  One  who  bids  at  auction  in  behalf  of  the  owner 
for  the  purpose  of  advancing  the  price. 

By-laws.  Rules  adopted  by  an  association  or  corporation 
for  the  government  and  conduct  of  its  affairs,  but  at  the  same 
time  subordinate  to  its  constitution    or  charter. 


SMITH'S  FINANCIAL  DICTIONARY.  91 


c 


C.  As  printed  on  the  tape*  by  the  stock  ticker  this  letter 
means  class  C  (of  bonds)  or  coupon  or,  when  following  a  sale, 
cash. 

Cable.     A  cable  despatch  reporting  a  foreign  market. 

Also,  a  transfer  of  money  (or  its  equivalent,  credit)  by  cable 
is  called  for  short  a  cable. 

Cable  transfer.  A  transfer  of  money  (or  its  equivalent, 
credit)  by  cable.  For  additional  information  see  Foreign  ex- 
change. 

Call.  A  call  (on  a  stock)  is  a  contract  or  written  agreement 
binding  the  issuer  to  deliver  to  the  holder  stock  named  in  the 
agreement  within  a  certain  time  at  a  certain  price  if  the  holder 
shall  so  demand  (or  in  other  words,  call  for  the  stock). 

For  example,  A  signs  a  promise  to  deliver  100  shares  of  some 
specified  stock  to  B  at  100  at  any  time  within  60  days  if  B 
makes  a  demand  for  it.  A  sells  this  promise  to  B  for,  say, 
$100.  If  within  the  60  days  the  stock  rises  in  price  so  that 
B  can  sell  it  at  a  profit  B  sells  and  calls  on  A  to  make  delivery 
of  the  stock.  The  stock  must  go  above  101  before  there  is  a 
profit  for  B.  If  the  stock  declines  or  does  not  go  above  loi 
B,  of  course,  does  not  call  for  it  and  A  makes  $100  on  his  risk. 
In  calling  for  the  stock  B  must  give  one  day's  notice  except 
on  the  last  day,  when  no  notice  is  required. 

If  a  dividend  becomes  due  on  a  stock  during  the  pendency 
of  a  call  on  it  the  dividend  goes  to  the  holder  of  the  call  if  he 
elects  to  receive  and  pay  for  the  stock. 

A  call  on  grain  or  cotton,  cofifee,  etc.,  is  based  on  the  same 
general  principle  as  in  the  case  of  stocks. 

For  additional  information  see  Privilege. 

Also,  a  call  is  the  act  of  calling  oflf  at  an  exchange  or  trading 
place  the  list  of  stocks  and  bonds  or  the  difiFerent  options 
or  futures  (months  of  delivery)  in  grain,  cotton,  coffee,  etc. 
As  the  various  stocks  or  commodities  are  called  the  buyers 
and  sellers  make  their  bids  and  oflFers. 


92  SMITH'S  FINANCIAL  DICTIONARY. 


The  term  call  also  is  applied  to  the  demand  from  the  com- 
pany issuing  a  stock  or  share  that  is  not  fully  paid  for  a  further 
payment  or  instalment  from  the  holders;  the  word  thus  has 
come  to  be  used  loosely  for  the  amount  of  the  instalment  or 
assessment.  This  use  of  the  word  is,  of  course,  distinct  from 
the  term  call  when  an  option  (privilege)  is  referred  to. 

Called  bond.  When  the  right  is  reserved  by  a  company 
which  has  emitted  a  bond  to  redeem  (pay)  it  after  a  certain 
time  and  notice  of  the  exercise  of  this  right  is  given  the  bond 
is  called  in — the  bond  is  then  a  called  bond.  Interest  on  such 
a  bond  ceases  after  the  bond  is  called. 

Call  letter.  A  term  used  in  Great  Britain  for  a  letter  from 
a  company  or  other  issuer  of  securities  demanding  from 
holders  the  payment  of  a  call   or  assessment  on  the  securities. 

Call  loan.  A  loan  payable  on  call  or  demand;  collateral  is 
usually  provided  to  secure  the  loan. 

In  New  York  state  the  requirement  that  not  more  than  6 
per  cent  interest  shall  be  charged  on  money  loaned  does 
not  apply  to  call  loans.  The  law  says :  "Upon  advances  of 
money  repayable  on  demand  to  an  amount  not  less  than  five 
thousand  dollars  made  upon  warehouse  receipts,  bills  of 
lading,  certificates  of  stock,  certificates  of  deposit,  bills  of 
exchange,  bonds  or  other  negotiable  instruments,  pledged  as 
collateral  security  for  such  repayment,  any  bank  or  individual 
banker  may  receive  or  contract  to  receive  and  collect,  as  com- 
pensation for  making  such  advances,  any  sum  to  be  agreed 
upon  in  writing  by  the  parties  to  such  transaction." 

In  a  stringency  in  money  the  rate  for  call  loans  goes  very 
high.  Many  times  it  has  gone  to  3-4  of  i  per  cent  "and  inter- 
est," which  is  equivalent  to  the  rate  of  279  3-4  per  cent  a  year. 
The  3-4  per  cent  is  the  premium  paid  on  the  money  and 
the  interest  is  at  the  legal  rate,  which  in  New  York  state 
is  6  per  cent.  The  premium  is  not  paid  each  day  while  the 
loan  stands,  but  is  a  premium  paid  for  obtaining  the  loan. 
But  the  loan  might  be  called  (the  return  of  the  money  de- 
manded) the  next  day,  in  which  case  the  borrower  might  have 
to  pav  the  same  premium  for  a  renewal  of  it  with  the  same 
lender.- 

By  New  York  Stock  Exchange  rules  a  demand  for  the  return 
of  a  call  loan  must  be  made  before  i  p.  m.  and  payment  must 


SMITH'S  FINANCIAL  DICTIONARY.  93 

be  made  before  or  at  2.15  p.  m.  the  same  day.  Also,  notice 
of  intention  to  pay  a  call  loan  must  be  given  before  i  o'clock 
and  payment  must  be  made  before  2.15  o'clock. 

It  is  not  the  practise  of  the  banks  in  the  Wall  Street  district 
to  require  from  regular  borrowers  a  new  note  every  time  a  call 
loan  is  made.  The  continuing  agreement  (see  Continuing 
agreement)  covers  new  call  loans  as  well  as  old  ones.  If, 
however,  a  special  note  is  exacted  the  regular  stock  note  (col- 
lateral note — see  Collateral  note)  is  used,  the  note  being  made 
payable  on  demand  (in  a  time  loan  the  note  is  made  payable  at 
a  specified  time). 

Notes  used  in  call  loans  are  generally  printed  on  colored 
paper  (most  frequently  blue  paper)  to  distinguish  them  easily 
from  time  notes,  which  are  almost  invariably  printed  on  white 
paper. 

The  advantage  in  borrowing  money  on  call  is  that  it  need 
not  be  retained  when  the  borrower  no  longer  has  use  for  it. 

In  Great  Britain  the  term  generally  used  for  call  loan  is 
day-to-day  loan. 

Call  money.  Money  borrowed  which  is  returnable  on  the 
call  or  demand  of  the  lender.     See  Call  loan. 

Call  of  more.  London  Stock  Exchange  term ;  a  call  of  more 
gives  the  holder  the  right  to  call  for  the  delivery  by  the  seller 
of  an  additional  amount  of  stock  equal  to  the  amount  named  in 
the  bargain,  or  in  other  words,  to  call  for  twice  as  much  stock 
as  is  named  in  the  contract.  If  a  man  buys  £1,000  consols 
with  the  call  of  more  at  96  1-2  he  can  call  for  the  delivery  by 
the  seller  of  £2,000.  For  this  extra  right  or  privilege  the 
holder  of  the  call  pays  an  extra  price. 

Call  paid.     On  the  London  Stock  Exchange  a  stock  or  share 
is  said  to  be  dealt  in  "call  paid"  when  a  call    or  assessment 
has  been  made  upon  it  and  has  been  paid  by  the  seller.     It  is 
the  opposite  of  cum  call ;  see  Cum  call. 

Cambism.  The  theory  and  practise  of  exchange,  particu- 
larly foreign  exchange  ;  see  Foreign  exchange. 

Cambist.  A  dealer  in  (foreign)  exchange ;  a  manual  giving 
the  moneys,  weights  and  measures  of  different  countries  and 
their  equivalents  is  also  called  a  cambist. 

Cancelling  certificates.     Stock  certificates,  bonds    and  con- 


94  SMITH'S  FINANCIAL  DICTIONARY. 

pons  are  usually  cancelled  by  punching  holes  through  the  sig- 
natures on  them. 

Cancel  order.  An  order  recalling  or  countermanding  a  pre- 
vious order  to  buy  or  sell,  as  stocks,  grain,  cotton,  coffee,  etc. 

Capel  Court.  This  term  signifies  the  speculative  centre  in 
London  as  Wall  Street  signifies  the  speculative  centre  in 
New  York. 

The  Capel  court  entrance  to  the  London  Stock  Exchange 
looks  out  upon  the  east  front  of  the  Bank  of  England  on 
Bartholomew  lane,  but  the  other  entrances,  on  Throgmorton 
street   and  Old  Broad  street,  are  more  thronged. 

The  name  Capel  Court  was  given  to  the  London  financial 
centre  from  the  fact  that  the  entrance  to  the  first  building 
erected  (1801)  for  use  as  a  stock  exchange  was  from  Capel 
court. 

Capital.     Wealth  employed  in  or  available  for  production. 

Specifically,  the  capital  of  a  stock  company  is  the  property 
and  perhaps  good  will  used  in  its  business  at  a  valuation  on 
which  profits  or  dividends  are  calculated.  The  valuation  is 
represented  by  stock.  Bonds  in  contradistinction  to  stock 
represent  indebtedness. 

Capital  amount.     The  original  amount    or  sum  ;  principal. 

Capital  expenditure.  Expenditure  against  which  capital 
stock  is  issued. 

Capitalist.  An  owner  of  capital,  especially  one  who  has 
large  means. 

Capitalization.  Placing  a  value  on  and  creating  something 
to  represent  that  value. 

For  instance,  the  capitalization  of  a  business  consists  in 
placing  a  value  on  it  and  then  issuing  stock  to  represent  that 
value.  Bonds  in  contradistinction  to  stock  represent  an  in- 
debtedness. 

It  is  a  common  practise,  however,  to  speak  of  the  amount 
of  the  bonds  of  a  company  and  the  amount  of  its  stock,  both 
added  together,  as  the  capitalization  of  the  company — as  the 
amotmt  for  Avhich  it  is  capitalized. 

Capital  liabilities.  The  stock  issued  by  a  company.  It  is  a 
common  practise,  also,  to  include  bonded  indebtedness  under 
this  head. 

Capital  sum.     The  original  sum    or  amount;  principal. 


SMITH'S  FINANCIAL  DICTIONARY.  93 


Captain  of  Industry.  This  title,  while  not  new,  was  brought 
into  general  use  by  a  luncheon  in  New  York  arranged  in  honor 
of  Prince  Henry  of  Prussia  when  he  visited  the  United 
States  in  1902  and  which  was  attended  by  men  at  the  head  of 
or  who  by  their  genius,  means  or  otherwise  were  responsible, 
in  whole  or  in  part,  for  the  creation  and  development  of  im- 
portant industries  in  the  United  States.  John  Pierpont  Mor- 
gan, a  leading  financier,  presided  at  the  luncheon  and  the  men 
who  attended  it  were  designated  Captains  of  Industry. 

Cargo.  A  name  for  all  or  for  any  part  of  the  goods  or  mat- 
erial with  which  a  vessel  is  loaded. 

Car  lots.  A  grain  trade  term  which  refers  to  the  number  of 
cars  of  grain  received  and  inspected  daily  at  the  chief  grain 
centres. 

Car  miles.  A  railroad  term ;  the  number  of  miles  traversed 
(in  a  year  or  other  given  time)  by  all  cars  on  a  railroad.  The 
number  of  miles  traversed  by  all  cars  divided  by  the  number 
of  cars  shows  the  average  number  of  miles  traversed  by  each 
car.     Car  miles  means  the  same  as  car  mileage. 

Carrying.  A  speculator  who  is  long  of  stocks  is  carrying 
stocks;  likewise,  a  broker  who  has  bought  stocks  for  a  cus- 
tomer on  margin  is  carrying  the  stocks. 

Carrying  charges.  A  designation  for  the  interest  paid  by 
buyers  of  stocks  on  the  money  represented  by  the  difiference 
between  the  margin  deposited  and  the  purchase  price  of  the 
stock.  Sellers  of  short  stocks  as  a  rule  have  not  to  pay 
interest  charges  ;  only  buyers  have  to  pay  such  charges. 

Grain  carrying  charges  consist  of  storage,  interest  and 
insurance.  They  are  represented  by  the  excess  of  the  price  for 
future  delivery  over  the  cash  price  (the  price  for  immediate 
delivery).  Illustration :  If  wheat  for  a  future  delivery  is 
4  cents  higher  than  cash  wheat  (wheat  for  immediate  deliv- 
ery) the  4  cents  represents  warehousing  and  insurance  up  to 
the  expiration  of  the  contract.  If  the  cash  market  (price) 
declines  i  cent  before  the  termination  of  the  contract  the  short 
seller  makes  5  cents  profit;  if  it  remains  stationary  he  makes 
4  cents:  if  it  advances  3  cents  he  still  profits  i  cent. 

Carrying  over.  On  the  London  Stock  Exchange  carrying 
over  is  the  postponement  of  the  adjustment  of  an  account 
until  another  settlement  (settlements  occur  fortnightly).    Each 


g6  SMITH'S  FINANCIAL  DICTIONARY. 

bargain  carried  over  is  closed  for  cash  and  reopened  for  the 
new  account  (see  Settlement,  The). 

Carrying  over  charges  are  those  which  the  buyer  or  seller 
(as  the  case  may  be)  has  to  pay  for  the  privilege  of  not  receiv- 
ing or  delivering  stock  at  the  regular  time.  The  charge  for 
non-payment  of  cash  for  stock  is  called  contango.  A  contango 
is  generally  paid  by  bulls  and  received  by  bears;  but  if  a  stock 
has  been  so  much  oversold  that  it  is  scarce  for  delivery  a 
charge  is  made  for  non-delivery  of  the  stock,  which  is  called  a 
backwardation ;  this  is  paid  by  bears  and  received  by  bulls. 
If  the  accounts  balance  the  rate  is  even. 

Carry-over.  On  the  London  Stock  Exchange  carry-over  is 
a  term  used  to  signify  the  aggregate  of  the  contracts  in  one 
or  in  all  stocks  continued  or  carried  over  to  the  next  settle- 
ment. 

The  carry-over  as  a  whole  designates  the  collective  operation 
by  which  the  speculative  position  open  for  the  rise  or  fall  is 
continued  from  one  settlement  to  the  next.  When  the  posi- 
tion open  is  for  the  rise  speculators  have  to  borrow  money  and 
pay  a  contango  rate  to  money  lenders ;  when  the  position  open 
is  for  the  fall  speculators  have  to  borrow  stock  from  the 
holders  and  pay  them  a  backwardation.  It  is,  however,  a  com- 
paratively rare  occurrence  that  a  stock  is  so  much  oversold 
by  speculators  that  a  backwardation  can  be  exacted  from  them. 

Carte  blanche  order.  In  stocks  or  in  commodities  an  order 
conferring  unlimited  authority  in  buying  (or  selling). 

Car  trust.  A  trust  created  for  holding  title  to  cars  until 
paid  for  by  the  railroad  which  bought  and  is  using  them. 
Certificates  or  bonds,  so-called,  are  issued  under  the  trust  the 
same  as  under  other  liens    or  mortgages. 

Cartwheel.  A  colloquial  name  for  the  silver  dollar  of  the 
United  States ;  so  called  because  of  the  large  size  of  the  coin. 

Case  of  need.     See  In  case  of  need. 

Cash.     A  colloquial  name  for  money. 

Also,  a  cash  (or  spot)  transaction  is  a  transaction  for  imme- 
diate consummation  and  settlement.  Usually  in  mercantile 
dealings,  however,  the  term  cash  permits  payment  within  lo 
days. 

For  the  application  of  the  term  cash  to  dealings  in  stocks 
and  commodities  see  For  cash. 


SMITH'S  FINANCIAL  DICTION AKY.  97 


Also,  to  cash  means  lo  make  collection.  For  instance,  to 
cash  a  check  or  h  coupon  is  to  make  collection  of  the  amount 
of  it. 

Also,  cash  is  the  name  given  to  the  coin  used  as  small  change 
in  China  and  parts  of  the  East  Indies.  The  cash  of  China  is 
i-io  candareen  and  is  equal  to  i-io  cent. 

Cash  assets.  .Assets  consisting  of  cash  in  hand  ur  in  bank 
or  assets  that  can  readily  be  converted  into  cash  (money). 

Cash  credit.  Usually  a  credit  at  a  bank  established  by  the 
negotiation  of  a  lodn  from  a  bank  which  the  borrow^er  is 
privileged  to  draw  against  by  check. 

Cash  dividend.  One  payable  in  cash ;  that  is,  by  check, 
which  calls  for  cash. 

Cashier.  An  officer  of  a  bank  or  other  moneyed  institution, 
having  charge  of  its  funds. 

The  mechanism  of  a  bank  is  under  the  control  of  the  cashier, 
who  is  accountable  to  the  board  of  directors,  by  whom  he  is 
appointed   and  to  whom  he  gives  bond. 

The  name  cashier  also  is  commonly  applied  to  the  person 
who  receives  and  pays  out  money  for  a  corporation  or  firm. 
vSuch  a  person  in  a  bank  is  called  a  teller. 

Cashier's  check.  A  check  upon  a  bank  signed  by  its  cashier. 
When  money  is  borrowed  from  a  bank  the  borrower,  unless 
the  money  is  to  be  placed  to  his  credit  in  that  bank,  receives 
from  the  cashier  a  check  for  the  amount  which  he  may  deposit 
in  any  other  bank  or  may  make  payable  to  somebody  else  the 
same  as  any  other  check. 

A  cashier's  check  constitutes  a  common  form  of  exchange ; 
see  Exchange. 

Cats  and  dogs.     A  colloquial  name  for  worthless  securities. 

CB.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  currency  bond. 

Cent.  One-himdredth  part  of  a  dollar  ("United  States)  ; 
there  is  a  bronze  coin  bearing  the  name  cent. 

Also  see  Moneys  of  the  world. 

Cental.     A   hundredweight  or  too  pounds  avoirdupois. 

Central  institution.  A  name  often  applied  in  Great  Britain 
to  the  Bank  of  England. 

Central  reserve  cities.     See  Reserve  cities. 

Certificate  of  deposit.     A  certificate  of  deposit  is  a  receipt 


98  SMITH'S  FINANCIAL  DICTIONARY. 

from  or  acknowledgment  by  a  bank  that  a  certain  amount  of 
money  has  been  entrusted  to  it  as  a  special  deposit.  It  is 
transferable.  It  may  be  made  payable  by  a  correspondent  of 
the  bank  in  some  other  place.  A  certificate  of  deposit  cannot 
be  drawn  against  by  check. 

A  certificate  of  deposit  is  called  a  demand  certificate  when 
it  is  payable  on  demand  or  a  time  certificate  when  it  is  payable 
on  or  after  a  certain  future  time.  A  time  certificate  usually 
bears  interest  at  a  specified  rate. 

A  certificate  which  represents  stock  deposited  for  the  reor- 
ganization of  a  compan}'  or  for  some  other  purpose  is  also 
called  a  certificate  of  deposit. 

Certificate  of  indebtedness.  An  acknowledgment  of  debt. 
If  not  paid  within  the  time  named  in  it  the  holder  may  apply 
for  the  appointment  of  a  receiver.     See  Bond. 

Certificate  of  stock.  The  document  which  attests  ownership 
of  the  amount  of  stock  specified  in  it. 

The  New  York  Stock  Exchange  rarely  admits  to  dealings 
stocks  of  the  par  (face)  value  of  more  than  $ioo  or  b)onds  of 
more  than  $10,000.  Nor  does  it  accept  as  a  delivery  a  single 
certificate  for  more  than  100  shares  of  stock  or  a  single  regis- 
tered bond  for  more  than  $10,000.  Delivery  of  coupon  bonds 
must  be  in  denominations  of  $1,000  or  $500,  large  bonds  (over 
$1,000)  or  small  bonds  (less  than  $500)  being  good  only  in 
special  transactions. 

When  a  broker  buys  stock  for  a  speculator  the  certificate  is 
not  made  out  in  the  name  of  the  speculator.  A  certificate 
signed  (assigned)  in  blank  (see  Assigned  in  blank)  is  received 
by  the  buying  broker  from  the  selling  broker  and  this  certifi- 
cate may  on  the  resale  of  the  stock  be  delivered  to  the  new 
buying  broker,  and  so  on,  the  same  certificate  continuing  to 
serve  indefinitely  in  transactions. 

Certification.  For  the  meaning  of  this  term  on  the  London 
Stock  Exchange  see  Certified  transfer. 

Certified  accountant.  Another  name  for  chartered  account- 
ant ;  see  Chartered  accountant. 

Certified  check.  A  check  having  written  across  its  face  the 
signature  of  (usually)  the  cashier  or  paying  teller  of  the  bank 
on  which  it  is  drawn  certifying  to  the  signature  of  the  drawer 
and  to  the  fact  that  the  latter  has  sufficient  funds  on  deposit 


SMITHS  FINANCIAL  DICTIONARY.  99 


with  which  to  pay  it.  Funds  are  held  in  reserve  from  the 
drawer's  account  by  the  bank  to  meet  the  check. 

When  the  holder  of  a  check  takes  it  to  the  bank  upon  which 
it  is  drawn  and  has  it  certified  the  drawer  of  the  check  and 
the  indorsers,  if  there  are  any,  are  released  and  thereafter  the 
holder  must  look  to  the  bank  alone.  The  bank  is  absolutely 
liable  upon  the  check  unless  it  was  "raised"  cither  before  or 
after  certification.  The  bank  by  certifying  the  check  guar- 
antees the  genuineness  of  the  signature  of  the  drawer  and 
certifies  that  it  has  in  its  possession  funds  belonging  to  the 
drawer  sufficient  to  meet  the  check  and  it  thereby  engages 
that  those  funds  shall  not  be  withdrawn  by  the  maker  of  the 
check  to  the  prejudice  or  loss  of  any  bona  fide  holder  of  the 
check. 

But  the  certification  of  the  check  does  not  imply  any  further 
or  greater  responsibility  or  imply  that  the  body  of  the  check 
is  genuine.  When,  therefore,  a  check  is  raised  before  certifi- 
cation the  certifying  bank  cannot  be  called  upon  to  pay  the 
amount  of  the  raised  check ;  or  if  a  bank  certifies  a  raised 
check  by  mistake  and  pays  the  same  without  culpable  negli- 
gence it  can  recover  the  amount  as  money  paid  by  mistake 
and  the  same  rule  applies  if  the  check  is  raised  after  certifi- 
cation. 

In  some  cities  checks  are  not  certified  by  banks,  but  instead 
due  bills,  so-called,  are  employed.  When  guaranty  of  the  pay- 
ment of  a  check  by  a  bank  is  desired  the  check  is  delivered  to 
the  bank  which  retains  the  check  and  issues  in  place  of  it  a  due 
bill  payable  by  the  bank  itself.  This  due  bill  may  be  deposited 
in  another  bank  the  same  as  a  check. 

Also  see  Overcertification. 

Certified  transfer.  English  term ;  when  a  stockholder  has 
sold  only  a  portion  of  the  stock  represented  by  a  certificate 
held  by  him  the  certificate  and  a  transfer  deed  (assignment) 
are  lodged  with  the  company  which  issues  a  fresh  certificate 
to  him  for  the  amount  unsold  and  indorses  the  transfer  to  the 
effect  that  it  is  good  for  the  remaining  amount  of  stock  :  then 
the  transfer  is  said  to  be  certified  or  marked  and  the  act  of 
certifying  or  marking  is  called  certification. 

CH.     As  printed  on  the  tape  by  the  stock  ticker  these  letters 


100  SMITH'S  FINANCIAL  DICTIONARY. 


mean  clearing  house  (clearing  house  of  the  New  York  Stock 
Exchange). 

Chain  rule.  An  arithmetical  operation  which,  by  means  of 
a  chain  of  intermediate  relationships,  establishes  a  comparison 
betwen  two  quantities  not  directly  related.  Chain  rule  is  used 
largely  in  calculations  in  foreign  exchange. 

Chairman.  The  one  who  presides  at  a  meeting,  as  a  meeting 
of  a  board  of  directors. 

Also  see  Chairman  of  the  Board. 

Chairman  of  the  board.  When  the  board  of  directors  of  a 
railroad  company  or  other  company  is  presided  over  by  an 
officer  designated  as  the  chairman  of  the  board  instead  of  by 
the  president  of  the  company  the  chairman  of  the  board  is  the 
directing  financial  officer  and  is  in  fact  the  head  of  the  com- 
pany. The  president  then  occupies  a  subordinate  position ; 
he  is  the  chief  operating  officer    or  the  chief  managing  officer. 

Chamber  of  commerce.  A  title  often  adopted  by  an  organ- 
ization formed  to  promote  commercial  or  mercantile  interests. 

Chancellor  of  the  Exchequer.  The  minister  of  finance  in  the 
British  Cabinet. 

'Change.     An  abbreviation  of  exchange. 

In  London  the  term  change  is,  strictly  speaking,  only  ap- 
plied to  the  market  for  foreign  bills.  "On  'change"  means  in 
the  foreign  bills  (foreign  exchange)  market,  which  meets  on 
Tuesdays  and  Thursdays  in  the  Royal  Exchange  (see  Course 
of  exchange).  But  the  term  is  also  used  loosely  and  inaccu- 
rately  of  the  stock  exchange. 

Change  alley.  The  early  meeting  place  (1698  to  about  1773) 
of  dealers  in  shares  and  stocks  in  London. 

Charge.  A  debit  entry  in  an  account ;  also,  the  price  de- 
manded for  a  thing ;  also,  a  burden  or  encumbrance  on  property 
or  resources,  as  interest  on  a  bond  or  mortgage. 

In  making  exchanges  at  the  Banker's  Clearing  House  in 
London  the  term  charge  means  the  total  of  articles  (items, 
checks,  drafts,  etc.)  presented  by  one  bank  for  collection  from 
another  bank.  The  term  employed  in  the  United  States  is 
exchanges   or  collection  items. 

Charge  and  discharge.  The  presentation  in  a  chancery 
court  (court  of  equity)  of  the  claims  and  accounts  of  the  plain- 
tiff against    the  defendant  and  those  of  the  defendant  against 


SMITHS  FINANCIAL  DICTIONARY.  joi 

the  plaintiff  so  that  the  balance  of  account  may  be  determined 
by  the  court. 

Charges.     See  Carrying  charges. 

Charges  forward.  A  commercial  term,  meaning  that  the 
carrying  and  other  charges  are  to  be  paid  by  the  receiver  of 
the  property. 

Charter.  The  charter  of  a  company  is  the  authority  con- 
ferred upon  it  by  a  special  act  of  legislature  to  do  business  and 
the  act  defines  the  purposes  and  prescribes  the  privileges  of 
the  company. 

It  is  a  common  though  incorrect  practise  to  designate  as  a 
charter  the  articles  of  incorporation  of  a  company  that  is 
formed  under  the  general  laws.  In  such  a  case  the  company 
merely  is  incorporated — not  chartered — and  its  articles  of  in- 
corporation are  merely  the  papers  it  files  with  the  proper 
authority  specifying  its  purposes,  etc. 

Also,  the  contract  for  the  lease  of  a  vessel  for  a  voyage  is 
called  a  charter. 

Chartered  accountant.  English  ;  one  who  holds  a  charter 
(certificate)  from  the  Institute  of  Chartered  Accountants  sta- 
ting that  he  has  passed  an  examination  and  is  competent  to 
perform  an  accountant's  work. 

Charter  party.  The  agreement  or  contract  entered  into 
when  a  vessel  is  chartered. 

Chasing  eighths  and  quarters.  A  colloquialism  ;  used  to  de- 
scribe the  occupation  of  a  so-called  scalper  in  a  speculative 
market,  who  is  content  with  small  profits — eighths  and  quar- 
ters. 

A  scalper  is  generally  a  member  of  an  exchange  who  trades 
for  his  own  account  and  has  not  to  pay  commissions. 

Chattel.  Any  article  of  personal  property.  A  certificate  of 
stock,  bond,  bill  of  exchange  (draft)  or  promissory  note  is  a 
chattel. 

Cheap  money.  IMoney  is  cheap  when  it  is  obtainable  at  a 
low  rate.  At  such  a  time  the  prices  of  securities  are  likely  to 
advance,  not  because  they  are  worth  more,  but  because  money 
is  worth  less,  the  purchasing  power  of  money  having  de- 
creased. 

Check.  An  order  for  money  that  is  on  deposit  with  a  bank, 
banker,  trust  company    or  other  monetary  institution. 


102  SMITHS  FINANCIAL  DICTIONARY. 


A  check  differs  from  a  bill  of  exchange  in  that  it  is  always 
payable  on  demand  and  always  purports  to  be  drawn  against 
a  deposit  of  funds. 

If  the  amount  stated  in  words  and  the  amount  stated  in  fig- 
ures in  a  check  do  not  agree  the  words  govern.  If  a  check 
passes  out  of  the  maker's  hands  without  having  been  dated 
the  holder  may  write  in  the  space  provided  for  the  date  a  date 
which  must  be  the  date  upon  which  the  check  was  received  by 
him  but  no  other  date.  A  check  dated  ahead  is  usually  re- 
garded as  a  bill  of  exchange  rather  than  a  check. 

When  a  check  is  paid  before  the  date  written  on  it  the  money 
so  paid  can  be  recovered. 

A  bank  is  not  liable  to  the  holder  of  a  check  unless  and 
until  it  accepts  or  certifies  the  check.  A  bank  is  not  bound 
to  make  partial  payment  on  a  check  if  the  drawer  has  not 
sufficient  funds  to  his  credit  to  make  payment  in  full. 

If  a  depositor  draws  several  checks  amounting  in  the  aggre- 
gate to  more  than  he  has  standing  to  his  credit  the  bank  pays 
the  checks  in  the  order  of  presentation  without  regard  to  dates 
or  numbers  until  the  depositor's  credit  is  exhausted.  The 
bank  may  refuse  to  honor  checks  subsequently  presented. 

Nothing  is  gained  by  adding  to  a  check  the  words  "in  full 
settlement"  with  the  idea  of  compelling  the  acceptance  of  an 
amount  smaller  than  the  amount  of  the  claim  for  the  payment 
of  which  the  check  is  issued.  The  creditor  to  whom  the  check 
is  issued  may  collect  the  check  and  still  sue  for  the  balance 
vet  due  him.  One  reason  he  is  allowed  to  do  so  is  because 
in  such  a  case  there  is  no  consideration  for  his  agreement  to 
forgive  the  other  part  of  his  debt  and  an  agreement  without 
consideration  cannot  be  enforced. 

In  most  states  the  death  of  a  bank  depositor  revokes  any 
checks  that  he  may  have  drawn  which  have  not  been  pre- 
sented up  to  that  time.  A  bank  is  protected  in  paying  a  check 
after  the  drawer's  death  if  ignorant  of  the  event. 

In  most  states  it  has  been  held  that  a  check  does  not  operate 
as  an  assignment  to  the  holder  of  the  amount  of  the  depositor's 
money  that  it  calls  for,  so  that  if  the  bank  refuses  to  pay  the 
check  the  holder  has  no  right  of  action  against  the  bank,  his 
remedy  being  against  the  drawer.  In  such  a  case  the  drawer 
is  the  only  one  who  has  right  of  action  against  the  bank.     Ac- 


SMJTfJ'S  FINANCIAL  DICTIONARY.  103 

cordingly,  though  a  bank  ought  to  pay  checks  in  the  order  of 
their  presentation,  it  need  not  do  so  and  the  drawer  is  the 
only  one  who  legally  can  complain  if  it  does  not. 

The  holder  of  a  check  ordinarily  may  delay  presentation  of 
it  to  the  bank  without  absolving  the  drawer  from  liability.  If, 
however,  the  bank  at  which  the  check  is  payable  fails  after  the 
check  has  been  outstanding  for  a  reasonable  time  and  the  bank 
at  the  time  of  its  failure  is  in  possession  of  funds  of  the  drawer 
sufficient  to  pay  the  check  the  loss  falls  on  the  holder  of  the 
check. 

But  in  order  to  hold  the  indorser  the  check  should  be  pre- 
sented to  the  bank  for  collection  the  day  it  is  received  by  the 
payee  (the  one  to  whom  the  amount  of  it  is  to  be  paid) — it 
must  be  presented  the  following  day.  In  case  the  payee  does 
not  reside  in  the  place  where  is  situated  the  bank  upon  which 
the  check  is  drawn  the  payee  must  transmit  it  for  collection 
not  later  than  the  hour  for  the  closing  of  the  last  mail  on  the 
day  following  the  day  on  which  he  received  it.  A  bank  receiv- 
ing it  for  collection  must  forward  it  on  the  day  of  its  receipt. 
To  send  it  through  various  banks  or  through  parties  in  ^'arious 
places  constitutes  negligence  if  the  time  of  presentation  is 
thereby  delayed. 

If  the  check  is  sent  to  an  agent  for  collection  he  is  bound  to 
present  it  on  the  day  of  its  receipt  if  received  in  business 
hours.  Sundays  and  holidays  are  not  counted  as  days  under 
this  rule. 

When  a  depositor  in  a  bank  offers  for  deposit  a  check  drawn 
by  another  depositor  in  the  same  bank  the  bank  may  refuse  to 
accept  it  or  it  may  accept  it  unconditionally  or  conditionally. 
If  accepted  conditionally  the  condition  commonly  imposed  is 
that  the  check  is  to  be  held  over  until  the  close  of  banking 
hours  and  then  is  to  be  accepted  or  rejected  in  accordance 
with  the  state  of  the  drawer's  account.  If  the  check  is  ac- 
cepted unconditionally  the  bank  is  responsible  for  the  amount 
of  it  whether  the  depositor's  account  is  good  for  the  sum  or 
not. 

The  Court  of  Appeals  of  New  York  state  has  held  :  "When 
a  genuine  check,  drawn  by  one  of  its  depositors  upon  a  bank, 
is  presented  by  the  drawee  to  that  bank  for  deposit  it  is  sub- 
stantially a  demand  for  payment  by  the  holder  of  the  check. 


104  SMITH'S  FINANCIAL  DICTIONARY. 

If  the  bank  accepts  the  check  and  pays  it,  either  by  deHvering 
the  currency,  or  giving  the  party  credit  for  it  as  a  deposit,  the 
transaction  is  closed  between  the  bank  and  such  party.  The 
bank  is  hable  for  the  amount  of  the  check,  ahhough  on  the 
same  day,  and  before  the  close  of  banking  hours,  but  after  it 
had  paid  other  checks  of  the  drawer  presented  later,  it  returned 
the  check  to  the  depositor  as  not  good,  and  although  the  ac- 
count of  the  drawer  was  overdrawn  at  the  time  of  the  deposit. 
In  the  case  of  a  deposit  of  a  check  drawn  upon  itself  the  bank 
becomes  at  once  the  debtor  of  the  depositor,  and  the  title  to 
the  deposit  passes  to  the  bank." 

The  Supreme  Court  of  the  United  States  has  reached  the 
same  conclusion.  Quoting  the  New  York  ruling  with  ap- 
proval it  said :  "When  a  check  on  itself  is  offered  to  a  bank 
as  a  deposit  the  bank  has  the  option  to  accept  or  reject  it,  or 
to  receive  it  upon  such  conditions  as  may  be  agreed  upon.  If 
it  is  rejected  there  is  no  room  for  any  doubt  or  question  be- 
tween the  parties.  If,  on  the  other  hand,  the  check  is  offered 
as  a  deposit  and  received  as  a  deposit,  there  being  no  fraud 
and  the  check  genuine,  the  parties  are  no  less  bound  and  con- 
cluded than  in  the  former  case.  Neither  can  disavow  nor 
repudiate  what  has  been  done.  The  case  is  simply  one  of  an 
executed  contract.  There  are  the  requisite  parties,  the  requi- 
site consideration,  and  the  requisite  concurrence  and  assent  of 
the  minds  of  those  concerned." 

If  a  deposit  is  made  in  a  bank  to  the  credit  of  A  as  agent  for 
B  the  bank  may  pay  checks  drawn  in  proper  form  by  the 
agent  unless  or  until  notified  by  the  principal  not  to  do  so. 
The  bank  is  privileged  to  assume  that  a  check  drawn  in  proper 
form  by  the  agent  in  favor  of  a  tliird  person  is  drawn  in  the 
course  of  the  agent's  performance  of  his  duties  and  it  may 
honor  them  accordingly.  The  bank,  however,  having  had 
notice  that  the  funds  are  held  by  the  agent  in  a  fiduciary 
capacit}-  can  ha\'e  no  lien  on  them  ior  a  i)ri\-ate  debt  of  the 
depositor,  that  is,  the  agent,  to  it.  If  it  allows  the  agent  to 
use  any  part  of  the  funds  in  the  settlement  of  balances  due 
from  tlie  agent  to  the  bank  arising  out  of  its  dealings  with 
liin.  in  1iis  priwate  capacity  tlie  l^ank  can  be  compelled  to  reim- 
burse the  ]irinci])al  for  such  amounts. 

A  check  i)ayable  by  the  I'nited   States  Treasury  must  be 


SMJl  HS  I-INANCIAL  DICTIONARY.  105 


indorsed  for  collection  in  handwriting  and  not  by  stamp  as  is 
a  common  practise  with  hank  checks  which  arc  to  be  deposited 
for  collection. 

It  is  a  common  practise  to  speak  of  a  demand  bill  of  ex- 
change (draft)  issued  by  a  bank  or  banker  as  a  check,  for  it, 
like  a  check,  is  payable  on  presentation. 

For  additional  information  see  Negotiable  instrument. 

Also,  to  check  means  to  test  the  accuracy  of  memoranda  or 
entries  by  comparison. 

Check  bank.     See  Cheque  bank. 

Checkbook.     A  book  containing  blank  forms  of  checks. 

Check  collection  charge.  A  charge  made  by  banks  for  the 
collection  of  checks  payable  at  banks  in  other  places.  For 
additional  information  see  Collection  charge. 

Check  exchange.  Check  exchange  means  sight  exchange  ; 
a  check  is  payable  at  sight,  or  in  other  words,  is  payable  on 
presentation. 

Checking  a  bargain.  London  Stock  Exchange  term ;  all 
Ijareains  done  between  members  or  firms  are  checked  next 
morning  in  a  room  in  the  basement  of  the  exchange  before  the 
beginning  of  business  in  the  house  (exchange).  The  clerks 
who  perform  this  work  repeat  to  one  another  the  terms  of  the 
bargain  and  if  there  is  any  dispute  refer  it  at  once  to  their  prin- 
cipals ;  they  are  known  as  checking  clerks  and  are  admitted  to 
the  exchange  as  attendants  for  their  employers,  but  are  not 
allowed  to  transact  business,  whereas  authorized  clerks,  so- 
called,  are  allowed  to  transact  business  on  the  exchange  for 
their  employers. 

The  corresponding  New  York  Stock  Exchange  term  is  com- 
parison :  see  Comparison. 

Cheque.     The  English  way  of  spelling  check. 

Cheque  bank.  The  cheque  (check)  bank  was  a  London  in- 
stitution which  furnished  a  convenient  mode  for  remitting 
money.  It  sold  a  cheque  (check)  payable  to  a  person  named 
for  the  amount  of  the  cheque,  plus  a  small  commission.  Un- 
fortunately its  business  was  not  conducted  successfully  and 
it  went  into  liquidation. 

Cheque  exchange.  Cheque  (check)  exchange  means  sight 
exchange;  a  cheque  is  payable  at  sight,  or  in  other  words,  is 
payable  on  presentation. 


io6  SMITHS  FINANCIAL  DICTIONARY. 

Chicago  Board  of  Trade.  The  exchange  in  Chicago  where 
deaHngs  in  grain,  provisions,  etc.,  are  conducted  on  an  exten- 
sive scale. 

The  official  title  of  the  Chicago  Board  of  Trade  is  "Board  of 
Trade  of  the  City  of  Chicago."  The  board  was  formed  as  a 
voluntary  organization  in  1848;  in  1850  it  was  incorporated 
under  the  general  incorporation  law  of  the  state  of  Illinois  and 
in  1859  a  special  charter  was  granted  to  it  by  the  legislature  of 
Illinois. 

Chicago  check.  The  name  given  to  the  form  of  check 
where  the  dollar  mark  to  be  followed  by  the  amount  in  figures 
is  at  the  end  of  the  line  on  which  the  payee's  name  is  written 
instead  of,  as  generally,  in  the  lower  left  hand  corner. 

Childers.  London  Stock  Exchange  name  for  the  2  3-4  per 
cent  British  consols  redeemable  in  1905,  which  were  inaugu- 
rated by  Mr.  Childers. 

Chop.  A  mercantile  term,  meaning  a  brand.  Exporters  to 
the  Orient  place  on  their  goods  a  distinguishing  chop,  usually 
in  native  characters,  so  that  the  natives,  who  would  not  under- 
stand other  marks,  may  order  by  chops  with  which  they  are 
familiar. 

Chopped  dollar.  The  name  in  China  for  a  Mexican  or  other 
silver  dollar  that  has  been  chopped  (stamped  with  native  char- 
acters). 

Chose.     Any  personal  property. 

Chose  in  action.  A  right  to  personal  property  or  money  not 
in  possession  but  recoverable  in  an  action  at  law  ;  also,  a  note, 
bond  or  other  written  obligation  upon  which  suit  may  be 
instituted. 

Chose  in  possession.     Any  property  in  rightful  possession. 

C.  i.  f.  These  letters  are  commonly  used  in  dealings  in 
grain,  cotton,  etc.,  to  signify  that  cost,  insurance  and  freight 
are  paid  or  included.  For  additional  information  see  Cost, 
insurance    and  freight. 

Cipher  code.     Same  as  code ;  see  Code. 

Circular  letter  of  credit.  Commonly  called  traveler's  letter 
of  credit;  a  demand  bill  of  exchange  (draft)  issued  by  a  dealer 
in  exclTange  and  payable  in  instalments  by  foreign  corresijond- 
ents  of  the  issuer  or  for  that  mailer  by  domestic  correspond- 
ents. 


SMlTI-rs  FINANCIAL  DICTIONARY.  107 

The  letter  is  a  circular  letter  in  the  fact  that  it  is  addressed 
to  any  and  all  the  correspondents  of  the  issuer.  When  it  is 
desired  to  obtain  money  the  letter  is  presented  to  a  correspon- 
dent of  the  issuer  with  a  check  on  the  issuer  for  the  sum  de- 
sired. The  correspondent  usually  prepares  (fills  out)  the 
check  and  the  holder  of  the  letter  signs  it  in  his  presence. 
The  signature  must  be  written  exactly  as  it  previously  had 
been  written  on  the  letter  of  credit.  The  correspondent  re- 
tains the  check,  writes  in  the  sum  drawn  on  the  letter  and 
then  returns  the  letter  to  the  holder. 

For  instance,  a  letter  of  credit  is  purchased  in  New  York 
by  a  person  who  is  going  abroad.  In  London  he  may  pre- 
sent it  to  the  correspondent  of  the  issuer  and  draw  part  of 
the  amount  of  it  in  pounds  sterling.  In  Paris  he  may  present 
it  to  another  correspondent  and  draw  more  money,  this  time  in 
francs.  In  Berlin  he  may  draw  marks,  and  so  on  until  the  full 
amount  of  the  credit  is  exhausted. 

Circular  note.  A  note  for  a  specified  amount  issued  by  a 
dealer  in  exchange  and  payable  by  any  correspondent  of  the 
dealer.     It  is  intended  for  the  use  of  a  traveler. 

A  traveler  purchases  a  number  of  these  notes,  say,  for  £10 
each.  The  traveler  indorses  each  as  he  presents  it  for  pay- 
ment. He  is  provided  with  a  letter  of  indication  which  bears 
his  signature  and  the  signature  on  the  note  must  correspond 
with  the  signature  in  the  letter  of  indication. 

Circulating  capital.  Capital  that  once  used  for  a  purpose  is 
not  again  directly  available  for  the  same  purpose,  as  wages. 

Circulating  medium.  Money  or  anything  that  serves  as 
money. 

Circulating  note.  A  promissory  note  in  circulation  as 
money,  as  a  bank  note. 

Circulation.  Money  in  use.  The  term  is  commonly  ap- 
plied to  notes  issued  by  national  banks,  for  information  as  to 
which  see  National  bank  note. 

City.  In  London  the  term  City  is  commonly  used  to  desig- 
nate the  financial  district  surrounding  the  Bank  of  England 
and  the  stock  exchange,  the  same  as  the  term  Wall  Street  is 
commonly  used  to  designate  the  district  in  New  York  sur- 
rounding and  including  the  stock  exchange  and  other  impor- 
tant financial  institutions. 


loii  SMITH'S  FINANCIAL  DICTIONARY. 

City  editor.  London  title  for  the  writer  of  the  article  in  a 
newspaper  which  describes  conditions  and  operations  in  the 
financial  markets,  including  the  market  for  stocks  and  bonds. 
In  the  United  States  the  title  is  financial  editor. 

Classified  bonds.  An  issue  of  bonds  is  sometimes  divided 
into  two  or  more  classes ;  for  instance,  into  class  A,  class  B, 
etc.,  which  classifications  are  usually  abbreviated  into  A 
bonds,  B  bonds,  etc.  The  A  bonds  may  be  entitled  to  interest 
at  or  up  to  a  specified  rate  before  interest  is  paid  on  the  B 
bonds ;  or  the  classification  may  be  for  the  purpose  of  desig- 
nating bonds  of  one  kind  which  bear  different  dates  of  issue 
and  likewise  mature  at  different  dates. 

Classified  stock.  A  stock  is  classified  when  any  particular 
kind  of  stock  is  divided  into  two  or  more  classes,  as,  for  in- 
stance, when  preferred  stock  is  divided  into  first  preferred  and 
second  preferred    and  perhaps  third  preferred. 

In  Great  Britain  ordinary  (common)  stock  is  frequently 
divided  into  two'classes — B  and  A  ;  other  names  for  these  two 
classes  being  preferred  ordinary    and  deferred  ordinary. 

Clean  acceptance.  A  clean  acceptance  on  a  bill  of  ex- 
change (draft)  is  when  the  drawee  (the  one  who  is  to  pay  the 
bill)  writes  on  the  face  of  it  only  the  word  "Accepted"  followed 
by  the  date  and  signature  or  followed  by  the  date,  signature 
and  place  of  payment.  Another  name  for  clean  acceptance  is 
general  acceptance. 

Clean  bill.  The  name  given  to  a  bill  of  exchange  which  is 
not  accompanied  by  documents.  For  instance,  a  banker's  bill, 
which  is  an  order  from  a  banker  in  one  place  to  a  banker  in 
another  place  to  pay  the  holder  the  amount  of  it  in  the  second 
place,  is  a  clean  l)ill. 

Clean  bond.  A  coupon  bond  without  indorsements  or  other 
writing  on  the  back. 

Also  see  Indorsed  bond. 

Clean  dollar.  The  name  in  China  for  a  Mexican  or  other 
silver  dollar  that  lias  not  been  diopped  (stamped  with  native 
characters^ 

Clearance.  A  certificate  from  the  proper  authority  that  a 
vessel  bound  for  a  foreign  port  has  complied  with  the  law  and 
lias  leave  to  sail.  In  domestic  trade  the  mere  departure  of  a 
vessel  from  port  is  called  a  clearance. 


SMITH'S  FINANCIAL  DICTIONARY.  109 

In  I  lie  grain  trade  a  consignment  of  grain  or  flour  shipped 
by  lake  or  ocean  is  called  a  clearance. 

Clear  day.  One  entire  intervening  business  day.  When 
one  clear  day  is  specified  in  a  transaction  the  transaction  does 
not  conclude  until  the  second  day  after  it  is  entered  into. 

Cleared  inward.  Said  when  the  formalities  at  the  custom 
house  in  connection  with  an  arriving  vessel  have  been  com- 
plied with. 

Cleared  outward.  Said  when  the  formalities  at  the  custom 
house  in  connection  with  a  departing  vessel  have  been  com- 
plied with. 

Clearing.  Clearing"  by  a  bank  is  the  presentation  at  the 
clearing  house  of  collectable  items  (checks,  drafts,  promissory 
notes,  etc.)  which  it  holds,  the  receipt  in  exchange  of  the 
items  payable  by  it,  and  the  settlement  of  the  difference  (bal- 
ance) by  collection  of  or  payment  of  the  amount  of  the  differ- 
ence. 

Clearing  a  check  or  a  bill  of  exchange  (draft)  consists  in 
presenting  it  for  payment. 

Clearing  by  a  stock  broker  is  the  operation  of  delivering 
stocks  and  receiving  pay  for  them,  or  the  reverse,  receiving 
stocks  and  paying  for  them. 

Clearing  house.  vSee  Clearing  house  of  the  associated  banks 
of  New  York ;  also  see  New  York  Stock  Exchange  clearing 
house. 

Clearing  house  agent.  Same  as  redemption  agent ;  a  name 
given  to  a  bank  which  is  a  member  of  the  clearing  house  and 
clears  for  another  bank  which  is  not  a  member. 

In  New  York  a  bank  which  is  a  clearing  house  member  can 
act  for  a  bank  which  is  not  a  member  only  by  consent  of  the 
clearing  house  committee. 

Clearing  house  balances.  The  term  clearing  house  balances 
means  tlie  payments  required  from  banks  to  settle  differences 
at  the  clearing  house.  Banks  present  the  items  (checks, 
drafts,  etc.),  which  are  collectable  by  them,  receive  in  ex- 
change the  items  payable  by  them,  and  then  receive  or  pay 
the  differences   (balances). 

For  aditional  information  see  Clearing  house  of  the  asso- 
ciated banks  of  New  York. 

Clearing  house   currency.     As   one   means   of   securing   an 


no  SMITH'S  FINANCIAL  DICTIONARY. 

elastic  asset  currency  which  would  be  entirely  safe  and  at  the 
same  time  responsive  to  the  needs  of  business  it  is  proposed 
by  some  that  the  privilege  of  emitting  circulating  notes  be 
taken  from  the  individual  banks  and  delegated  to  clearing 
houses.  This,  it  is  urged,  would  place  behind  the  notes  the 
combined  strength  of  the  associated  banks  and  would  also  do 
away  with  any  danger  of  reckless  emissions  of  notes  by  poorly 
managed  or  weak  institutions. 

Further,  the  advocates  of  this  system  think  it  would  be 
easier  in  this  manner  to  regulate  the  volume  of  currency  to 
the  demands  of  a  community  or  state  than  by  means  of 
numerous  issues  of  banks  acting  independently. 

Existing  clearing  houses  include  only  banks  in  the  larger 
cities  and  their  immediate  localities.  For  the  purposes  of  a 
clearing  house  currency  it  would  be  necessary  to  organize 
country  banks  into  clearing  house  associations  by  districts  or 
states,  as  the  case  might  be,  in  order  that  all  the  banks  might 
share  in  the  benefits  and  responsibilities  of  the  system. 

Clearing  house  gold  certificates.  In  New  York  these  are 
certificates  or  receipts  for  gold  deposited  in  the  vaults  of  the 
clearing  house  or  in  the  Sub-Treasury  and  are  transferable 
by  indorsement.  They  are  issued  in  denominations  of  $5,000 
and  $10,000  and  are  used  only  in  settling  balances  at  the  clear- 
ing house.  These  certificates,  inasmuch  as  they  represent 
actual  gold,  are  counted  in  the  reserves  of  banks  which  hold 
them. 

Clearing  house  loan  certificates.  These  certificates  are  oc- 
casionally issued  by  the  New  York  Clearing  House  Associa- 
tion in  an  emergency  or  monetary  stringency.  They  are 
issued  against  collateral  provided  by  banks  obtaining  the  cer- 
tificates and  approved  by  a  committee.  They  are  used  in  the 
settlement  of  the  daily  balances  between  banks  and  are  re- 
tired as  speedily  as  circumstances  will  permit. 

These  certificates  (which  in  New  York  are  issued  in  de- 
nominations of  $5,000)  are  practically  call  loans,  at  least  so 
far  as  the  banks  to  which  they  are  issued  are  concerned. 
While  demand  cannot  be  peremptorily  made  upon  banks  to 
which  they  have  been  issued  for  the  redemption  (payment)  of 
them  the  banks,  nevertheless,  may  redeem  them  at  pleasure. 
The  clearing  house  committee  may,  however,  as  in  the  case  of 


SMITH'S  FINANCIAL  DICTIONARY.  in 

call  loans,  demand  additional  collateral  (security)  should 
there  be  a  depreciation  in  the  value  of  the  collateral  deposited. 
There  is  an  incentive  for  the  banks  to  which  the  certificates 
are  issued  to  redeem  them  in  the  fact  that  interest  at  the  full 
legal  rate  has  to  be  paid  on  them  while  they  are  outstanding. 

In  1893  the  clearing-  houses  in  New  York,  Boston  and  Phila- 
delphia issued  $63,900,000  in  clearing  house  loan  certifi- 
cates. These  certificates  were  used  in  the  settlement  of  bal- 
ances between  the  member  banks  and  an  equal  amount  of 
money  was  released  to  supply  the  void  made  in  the  circulating 
medium  by  the  heavy  gold  exports  and  the  withdrawal  of 
money  from  the  banks  for  hoarding  and  for  current  hand-to- 
hand  use.  In  some  Southern  cities  the  clearing  houses  issued 
loan  certificates  in  as  small  amounts  as  25  cents  for  popular 
circulation  so  urgent  was  the  demand  for  currency.  The  ques- 
tion of  the  legality  of  this  latter  action  was  not  raised  at  the 
time  because  the  crisis  was  so  acute  that  wisdom  seemed  to 
forbid  any  questionings  that  might  make  it  worse. 

Clearing  house  money.  In  Boston  it  is  the  custom  of 
banks  which  are  debtor  at  the  clearing  house  to  borrow  from 
banks  which  are  creditor  for  the  purpose  of  settling  their  debit 
balances.  A  bank  which  lends  gives  to  the  bank  which  bor- 
rows from  it  a  draft  on  the  manager  of  the  clearing  house  and 
the  amount  of  this  draft  is  deducted  from  the  balance  due  the 
creditor  bank.  The  draft  is  subsequently  surrendered  to  the 
lending  bank  to  be  used  by  it  as  evidence  of  the  obligation  to 
it  of  the  borrowing  bank.  A  creditor  bank  may  lend  part  or 
all  of  its  balance.  The  borrowing  bank  may  retain  the  amount 
borrowed  until  it  is  called  for  by  the  lending  bank,  but  it  may 
pay  it  back  when  it  desires. 

The  rate  of  interest  charged  for  the  use  of  the  money  is 
agreed  upon  between  the  lender  and  the  borrower,  but  it 
generally  corresponds  to  the  open  market  rate  for  call  money 
— that  is,  money  returnable  on  demand.  The  rate  for  clearing 
house  money,  as  it  is  called,  is  reported  in  the  newspapers  the 
same  as  the  rates  for  call  and  time  money. 

Clearing  house  of  the  associated  banks  of  New  York.  This 
is  the  place  where  a  daily  settlement  of  differences  between 
tanks  belonging  to  the  New  York  Clearing  House  Association 
is  made. 


112  SMITH'S  FINANCIAL  DICTIONARY. 

In  clearing  each  bank  presents  its  total  claim  against  all 
other  banks  and  at  the  same  time  the  claims  of  all  other  banks 
against  it  are  presented.  If  the  result  is  a  credit  balance  for 
the  bank  the  bank  receives  it  in  cash ;  if  the  result  is  a  debit 
balance  the  bank  pays  it  in  cash.  The  credit  balances  of  all 
banks  when  combined  exactly  match  the  debit  balances  of  all 
banks  when  combined. 

When  a  bank's  clearings  are  spoken  of  the  expression  means 
the  amount  of  its  claims  against  all  other  banks — the  checks, 
promissory  notes  and  drafts  or  bills  of  exchange  which  it 
holds  that  are  payable  by  other  banks.  Its  balance  is  the 
difference  in  favor  of  or  against  it  which,  as  the  case  may  be, 
it  receives  or  pays  in  cash.  The  act  of  a  bank's  representative 
in  presenting  the  items  (checks,  drafts,  etc.)  payable  to  it  by 
other  banks  and  of  receiving  the  items  presented  by  other 
banks  and  payable  by  it  is  called  making  exchanges. 

Specifically,  the  matter  cleared  at  the  clearing  house  (the 
items  sent  to  the  clearing  house  for  collection)  consists  of 
checks  and  also  promissory  notes  and  drafts  or  bills  of  ex- 
change when  they  have  been  certified  by  the  banks  at  which 
they  are  payable.  This  certification  is  a  guaranty  by  the 
banks  at  which  they  are  payable  that  they  will  be  paid — that 
the  money  has  been  set  aside  for  their  payment.  In  addition 
to  the  matter  named  various  kinds  of  money  orders,  though 
not  authorized,  are  for  the  convenience  of  the  banks  passed 
through   (cleared  at)   the  clearing  house. 

Promissory  notes  and  drafts  or  bills  of  exchange  wdien  not 
certified  are  collected  by  hand — that  is,  by  messenger,  who 
presents  the  notes  at  the  banks  at  which  they  are  payable. 

With  the  exception  of  fractional  amounts  balances  are  set- 
tled with  legal  tender  notes  (United  States  notes  and  Treas- 
ury notes),  gold  coin,  United  States  gold  certificates  (which 
are  issued  against  gold  coin  held  in  the  Treasury)  and  clearing 
house  gold  certificates  (which  are  issued  against  gold  coin 
held  in  the  vaults  of  the  clearing  house  or  in  the  vaults  of  the 
Sub-Treasury). 

In  some  clearing  houses  settlements  are  made  by  drafts  of 
the  manager  against  debtor  banks  and  in  favor  of  creditor 
banks  ;  thus  no  money  passes  at  such  clearing  houses. 

Also  see  Bank  statement. 


SMITH'S  FINANCIAL  DICTIONARY.  113 


At  the  Bankers'  Clearing  House  in  London  London  bills 
and  checks  are  sent  in  by  the  banks  at  different  times  through- 
out the  day  and  are  cleared  between  4  and  5  o'clock ;  country 
checks  are  cleared  at  noon.  The  Bankers'  Clearing  House 
return  (statement)  is  issued  only  once  a  week,  on  Thursday, 
but  it  gives  the  figures  for  each  day. 

Clearing  house  sheet.  The  printed  form  upon  which  the 
operations  of  a  bank  at  the  clearing  house  are  recorded.  Be- 
fore the  sheet  is  taken  from  the  bank  to  the  clearing  house  its 
claims  against  other  banks  are  entered  on  the  sheet.  Then, 
at  the  clearing  house  the  claims  of  other  banks  against  it  are 
entered  on  the  sheet  and  the  difference  in  the  totals  (called 
the  balance)  is  ascertained.  For  additional  information  see 
Clearing  house  of  the  associated  banks  of  New  York. 

For  information  as  to  the  sheet  used  in  clearing  transac- 
tions in  stocks  see  New  York  Stock  Exchange  clearing  house. 

Clearing  house  stocks.  Those  on  the  list  cleared  at  the 
New  York  Stock  Exchange  clearing  house.  For  information 
see  New  i  ork  Stock  Exchange  clearing  house. 

Clearing  matter.  The  matter  cleared  (presented  for  collec- 
tion) at  a  clearing  house  (of  banks).  It  consists  of  checks, 
drafts  (bills  of  exchange)  and  promissory  notes  (only  those 
notes  which  are  payable  at  specified  banks). 

Client.  This  word  is  uniformly  used  on  the  London  Stock 
Exchange  instead  of  customer,  which  is  the  word  commonly 
used  on  the  New  York  Stock  Exchange. 

Clique.  A  name  given  to  a  combination  of  speculators 
formed  for  the  purpose  of  manipulating  a  stock  or  a  com- 
modity or  a  market  as  a  whole. 

Close  corporation.  Name  given  to  an  incorporated  com- 
pany the  stock  of  which  is  held  by  a  few  persons  and  is  not 
for  sale.  When  a  private  business  is  continued  as  an  incor- 
porated company  instead  of  a  partnership  and  stock  is  al- 
lotted to  each  partner  for  his  interest  or  share  in  the  business 
the  company  is  called  a  close  corporation.  An  entirely  new 
business  or  enterprise,  however,  may  be  and  often  is  started 
as  a  close  corporation  instead  of  a  partnership.  Usually  there 
is  an  agreement  among  the  stockholders  whereby  each  is  pro- 
hibited from  disposing  of  or  transferring  his  stock  without  the 
consent  of  the  others. 


IJ4  SMITH'S  FINANCIAL  DICTIONARY. 

What  in  the  United  States  is  known  as  a  close  corporation 
is  in  Great  Britain  termed  a  private  company. 

Closed.     Said  when  a  transaction  is  finally  completed. 

Closed  for  dividend.  Means  that  the  stock  transfer  books 
are  closed  pending  the  payment  of  a  dividend.  In  Great  Bri- 
tain the  term  shut  for  dividend  is  sometimes  used.  For  addi- 
tional information  see  Books  closed. 

Closed  out.  Finally  disposed  of.  For  instance,  when  the 
last  of  a  lot  of  stock  that  has  been  carried  (or  held)  is  sold  it 
has  been  closed  out. 

Also,  when  the  account  of  a  speculator  has  been  liquidated 
without  his  consent  because  of  failure  on  his  part  to  provide 
additional  margin  he  has  been  closed  out,  or  more  correctly 
speaking,  his  account  has  been  closed  out. 

Closed  trade.  A  speculative  term,  meaning  a  trade  (in  a 
stock  or  in  grain,  cotton,  coffee,  etc.)  that  has  been  completed. 
For  instance,  if  a  speculator  who  bought  has  sold  the  trade  is 
closed ;  or,  if  a  speculator  who  sold  short  has  bought  back  the 
trade  is  closed.    Also  see  Open  trade. 

Close  prices.  Prices  near  together.  For  instance,  a  bid 
and  asked  price  is  close  when  separated  by  only  a  small  frac- 
tion, as  lOO  bid  and  loo  i-8  asked.  Again,  the  term  applies  to 
a  stock  or  a  commodity  in  which  the  fluctuations  in  the 
price  are  small   or  narrow. 

In  mercantile  dealings  a  close  price  is  one  very  near  to  cost 
— one  that  allows  of  only  a  minimum  profit. 

The  term  close  price  as  used  on  the  London  Stock  Ex- 
change signifies  a  small  difference  between  the  price  at  which 
a  jobber  will  buy  a  stock  and  the  price  at  which  he  will  sell 
the  same  stock ;  see  Jobber. 

Closing  prices.  On  the  New  York  Stock  Exchange  and  on 
other  American  exchanges  these  are  the  prices  at  which  the 
last  sales  are  made. 

On  the  London  Stock  Exchange  closing  prices  are  the  prices 
at  which  business  is  done  or  at  which  stocks  are  quoted  at 
the  lime  when  the  hotise  (exchange)  is  closed  (4  p.  m.  )  ;  ofii- 
cial  prices  are  those  at  which  stocks  and  shares  are  quoted  in 
the  official  list,  which  is  made  up  at  3  p.  m.  on  ordinary  days 
and  at  t  p.  m.  on  Saturdays.     "Street"  prices  are  the  prices  at 


SMITH'S  FINANCIAL  DICTIONARY.  115 

which  stocks  are  last  quoted  in  the  latest  dealings  in  Shorter's 
court  or  Throgmorton  street. 

CMP.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  compromise. 

CN.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  consolidated   or  consols. 

Co.  Abbreviation  of  the  word  company ;  as  a  prefix  it 
means  "together  with,"  as  co-assignee,  co-administrator,  etc. 

Coaching  traffic.  English  term  for  what  in  the  United 
States  is  called  passenger  traffic,  or  in  other  words,  the  pass- 
enger business  of  a  railroad. 

Coal.     See  Anthracite  coal ;  see  Bituminous  coal. 

Coalers.  A  colloquial  name  for  the  stocks  of  the  anthracite 
coal-carrying  railroads. 

Coal  hole.  A  name  given  to  the  basement  of  a  former 
building  at  No.  23  William  street,  New  York,  where  calls  of 
stocks  were  held  and  dealings  conducted  by  outside  brokers 
(brokers  not  members  of  the  New  York  Stock  Exchange)  in 
1862  and  succeeding  years.  These  brokers  had  no  organiza- 
tion, but  paid  a  fee  to  the  owner  of  the  building  for  the  right 
to  enter  the  Coal  hole.  Reports  of  their  transactions,  how- 
ever, were  printed  in  the  newspapers  under  the  caption  "Sales 
at  the  Public  Stock  Board." 

For  information  as  to  the  present  manner  in  which  outside 
brokers  conduct  business ;  see  Outside  market. 

Coal  stocks.  The  stocks  of  the  leading  anthracite  coal-car- 
rying railroads  are  those  of  the  Central  of  New  Jersey,  Dela- 
ware, Lackawanna  &  Western;  Delaware  &  Hudson,  Lehigh 
Valley,  and  Reading  railroads.  The  Erie;  New  York,  On- 
tario &  Western,  and  Pennsylvania  railroads  also  are  large 
carriers  of  anthracite  coal,  but  these  roads  are  more  particu- 
larly classed  as  trunk  lines. 

C.  O.  D.     These  letters  stand  for  collect  on  delivery. 

Code.  An  arrangement  of  Avords  standing  for  phrases, 
numbers  or  quotations  so  that  telegraph  and  cal:)le  despatches 
may  be  sent  in  private   and  in  condensed  form. 

Coin.  A  piece  of  metal  or  any  alloy  of  metals  stamped  by 
public  authority  for  use  as  money 

United  States  gold  and  silver  coins  are  900  fine — that  is, 
900  per  cent  pure  gold  or  pure  silver.     The  gold  coins  consist 


u6  SMITH'S  FINANCIAL  DICTIONARY. 

of  900  parts  gold  alloyed  (mixed)  with  10  parts  silver  and  90 
parts  copper;  the  silver  coins  consist  of  900  parts  silver  and 
100  parts  copper.  The  nickel  coin  (the  5-cent  piece)  consists 
of  25  parts  nickel  and  75  parts  copper.  The  bronze  coin  (i 
cent)  consists  of  95  parts  copper,  3  parts  tin  and  2  parts  znic. 

The  gold  coins  now  minted  are  the  double-eagle  ($20), 
eagle  ($10),  half-eagle  ($5)  and  quarter-eagle  ($2.50). 

The  silver  coins  now  minted  are  the  dollar,  half-dollar,  quar- 
ter or  quarter-dollar   and  dime  (10  cents). 

The  ratio  of  the  gold  dollar  to  the  silver  dollar  is  15.988  to  i 
(practically  16  to  i). 

The  coinage  of  gold  in  the  United  States  is  free — that  is, 
gold  in  any  form  suitable  for  refining  may  be  deposited  in  a 
mint  or  assay  ofQce  belonging  to  the  government  and  after 
the  value  of  it  has  been  determined  by  refining  and  conver- 
sion into  bars  the  owner  will  be  paid  for  it  in  gold  coin.  A 
charge  is  made  for  refining  the  gold,  but  it  is  small. 

The  coins  of  Great  Britain  are  as  follows : 

The  gold  coins  are  the  sovereign  (£1  or  20  shillings), 
equal  to  $4.86.65,  and  the  half  sovereign  (10  shillings),  equal 
to  $2.43.32.  Two-pound  (equal  to  $9.73.31)  and  five-pound 
(equal  to  $24.33.28)  pieces  are  also  coined,  but  in  very  small 
numbers    and  not  for  general  circulation. 

The  silver  coins  are  the  crown  (5  shillings),  equal  to 
$1.21.66;  the  double-florin  (4  shillings),  equal  to  97.33  cents; 
the  half-crown  (2  1-2  shillings),  equal  to  60.83  cents;  the  florin 
(2  shillings),  equal  to  48.66  cents;  the  shilling  (12  pence), 
equal  to  24.33  cents;  the  sixpence  or  half-shilling.  (6  pence), 
equal  to  12.16  cents;  the  three-penny  piece  or  quarter-shilling, 
equal  to  6.08  cents.  Very  few  crowns  and  double-fiorins  are 
coined.  Four,  two  and  one-penny  silver  pieces  are  coined 
merely  for  the  cabinets  of  numismatists  and  for  "Maundy 
money,"  an  ancient  charitable  fund. 

The  minor  coinage  includes  the  penny  (about  2  cents),  the 
half-penny  (about  i  cent)  and  the  farthing  (about  1-2  cent). 
These  pieces  are  of  bronze. 

British  gold  coins  are  .916  2-3  fine;  the  silver  coins  arc  .925 
fine.     The  ratio  of  gold  and  silver  coins  is  14.2878  to  i. 

Individuals  have  the  right  to  deposit  gold  in  the  mint  and 
to  obtain  therefor   €3,  17  shillings  10  1-2  pence  per  ounce  of 


SMITH'S  FINANCIAL  DICTIONARY.  117 

metal  of  the  standard  fineness,  but  the  fact  that  there  is  con- 
siderable delay  in  coining  has  caused  it  to  become  the  prac- 
tise to  deposit  gold  with  the  Bank  of  England,  which  pays  at 
once  £3,  17  shillings  9  pence,  the  difference  of  i  1-2  pence 
being  charged  by  the  bank  for  interest,  etc.  The  difference  is 
called  demurrage.  The  bank  act  of  1844  requires  the  bank  to 
receive  gold  at  £3,  17  shillings  9  pence. 

Twenty  days  elapse  between  the  time  when  gold  is  deliv- 
ered to  the  mint  and  the  time  wdien  it  is  returned  in  the  shape 
of  sovereigns  or  other  coins.  The  fee  of  i  1-2  pence  per  ounce 
which  the  Bank  of  England  is  allowed  to  charge  when  it  gives 
sovereigns  or  other  gold  coins  in  exchange  for  bars  or  gold  in 
other  forms  is  just  equal  to  20  days'  interest  at  3  per  cent. 

In  the  Cornwall  (England)  tin  mines  to  coin  means  to  weigh 
and  stamp  blocks  of  tin. 

For  the  coins  of  the  countries  of  the  world  see  Moneys  of 
the  world. 

Coinage.  The  making  of  coins  for  use  as  money.  The  sys- 
tem of  coins  used  in  a  country  also  bears  the  name  coinage. 

The  coinage  of  the  United  States  was  begun  in  1793,  when 
the  gold  eagle  ($10),  silver  dollar,  silver  half-dollar,  silver 
quarter-dollar,  silver  dime  (10  cents)  and  the  copper  cent  and 
half-cent  were  issued. 

Coinage  act  of  1873.  This  was  the  act  of  February  12,  1873, 
which  discontinued  the  coinage  of  the  silver  dollar  by  omitting 
it  from  the  list  of  coins  authorized  to  be  minted  (manufact- 
ured) by  the  government. 

The  metal  in  the  silver  dollar  was  at  the  time  worth  two 
cents  more  than  the  metal  in  a  gold  dollar;  in  other  words,  a 
silver  dollar  was  worth  $1.02  in  gold  money.  Coinage  of  the 
silver  dollar  was  resumed  under  the  Bland-Allison  act  of 
February  28,  1878. 

Coining  rate  or  value.  This  term,  as  a  fact,  applies  only  to 
silver.  Gold  has  a  fixed  value  and  when  a  ratio  is  established 
between  gold  and  silver  gold  is  made  the  basis  and  so  many 
parts  of  silver  are  counted  as  equal  to  i  part  of  gold.  Tn 
other  words,  the  coininef  rate  of  silver  is  the  valuation  as  com- 
pared  with  gold  at  which  silver  is  coined,  in  contradistinction 
to  its  actual  value  as  bullion. 

The  coinincf  rate  or  value  of  silver  in  the  Ignited  .States  is 


ii8  SMITH'S  FINANCIAL  DICTIONARY. 

$1.29.29  per  ounce  of  fine  (pure)  silver,  which  makes  the  ratio 
between  silver  and  gold  15.988  to  i  (practically  16  to  i). 

Coin  of  the  realm.  The  money  of  the  country;  not  neces- 
sarily the  actual  metal  coins  of  the  country,  but  its  money 
which  passes  current.     The  term  is  a  figure  of  speech. 

Coin  value.  The  value  of  a  metal  after  its  conversion  into 
coins,  as  distinguished  from  the  bullion  value,  which  is  the 
commercial  or  market  value  of  the  metal. 

Collateral.  A  security  pledged  for  the  payment  of  a  loan  or 
an  obligation. 

Collateral  loan.  Such  a  loan  is  a  loan  on  a  promissory  note 
secured  by  collateral. 

The  collateral  in  the  case  of  a  Wall  Street  loan  consists  of 
securities  (stocks  and  bonds).  It  is  the  custom  of  banks  and 
other  lenders  to  accept  securities  as  collateral  at  80  per  cent 
of  their  market  value.  If  the  market  value  of  the  securities 
declines  subsequent  to  the  making  of  a  loan  the  lender  may 
call  for  (demand)  additional  securities.  The  replenishment 
of  the  collateral  with  additional  securities  is  called  remargin- 
ing. If  additional  securities  are  not  provided  on  demand  the 
lender  has  the  right  to  demand  payment  of  the  loan,  no  matter 
if  it  is  a  time  loan  and  has  not  matured.  If  the  loan  is  not 
paid  the  lender  may  without  further  notice  sell  the  securi- 
ties by  public  offering  (on  the  stock  exchange  or  b}'  auction). 
If  the  sale  of  the  securities  does  not  realize  the  amount  of  the 
loan  the  lender  may  take  judgment  for  the  balance  and  col- 
lect it  by  process  of  law. 

It  is  the  same  with  a  call  loan  as  with  a  time  loan — the  addi- 
tional securities  must  be  provided  or  the  loan  repaid  or  the 
securities  may  be  sold  and  judgment  taken  for  any  deficiency. 

Except  when  there  is  an  agreement  permitting  it  a  lender 
has  no  right  to  retain  collateral  to  secure  any  loan  but  the  one 
for  which  it  was  to  serve  as  security.  It  may  be  recovered  by 
suit  and  the  borrower  may  also  recover  any  loss  which  he  may 
have  suffered  from  the  unjustifiable  detention  of  his  securities. 

In  New  York  securities  pledged  as  collateral  are  said  to 
have  been  hypothecated. 

In  London  securities  pledged  as  collateral  are  said  to  have 
been  pawned. 

Collateral  note.     A  promissory  note    the  payment  of  which 


SMITH'S  FINANCIAL  DICTIONARY.  119 


is  secured  by  pledge  of  collateral,  which  in  the  case  of  a  Wall 
Street  loan  consists  of  securities  (stocks  and  bonds). 

The  following  form  is  customarily  used  for  a  Wall  Street 
loan.  The  form  may  be  used  for  either  a  time  or  a  call  loan 
by  inserting  in  the  blank  space  at  the  beginning  of  it  the  date 
when  payable  if  it  is  a  time  note  or  the  word  "demand"  if  it 
is  a  call  note : 

$ New  York, 190 

On Without  Grace,  for  value  received,  the  under- 
signed promise  to  pay  to  THE  THIRTY-SEVENTH  NATIONAL 
BANK  OF  THE  CITY  OF  NEW  YORK,  or  Order,  at  its  Banking  Office 
in  New  York  City,  in  funds  current  at  the  New  York  Clearing  House,  with 

interest  from  the  date  hereof  at  the  rate  of per  cent  per  annum 

(payable  quarterly  on  March  31,  June  30,  September  30  and  December  31) 

DoLLARS,^ 

having  deposited  with  the  said  Bank  as  collateral  security  for  the  payment 
of  this  and  any  other  liability  or  liabilities  of  the  undersigned  or  of  the 
guarantors  hereof  to  the  said  Bank,  due  or  to  become  due,  or  which  may 
hereafter  be  contracted  or  existing,  the  following  property,  viz : 


of  an  estimated  market  value  of  $ ,,  and  the  undersigned  also 

hereby  giving  to  the  said  Bank  a  lien  for  the  amount  of  all  the  said  lia- 
bilities upon  all  the  property  or  securities  at  any  time  given  unto  or  left  in 
the  possession  or  custody  of  the  said  Bank  by  or  for  the  undersigned,  for 
safe  keeping  or  otherwise,  or  in  which  the  undersigned  has  (or  have)  any 
interest,  and  also  upon  the  balance  of  the  deposit  account  of  the  under- 
signed with  the  said  Bank,  existing  from  time  to  time. 

In  case  the  securities  at  any  time  pledged  for  any  of  the  above  named 
liabilities  should  decline  in  market  value  or  for  any  reason  become  unsatis- 
factory to  the  said  Bank,  the  undersigned  agree  to  deposit  with  the  said 
Bank  additional  securities  to  the  satisfaction  of  the  said  Bank ;  and  in  case 
of  failure  so  to  do  forthwith,  this  note  shall  become  at  once  due  and  pay- 
able without  demand  of  payment  thereof,  and  the  said  Bank  may  imme- 
r^iately  sell  and  apply  the  said  securities  in  the  manner  and  with  the  effect 
as  hereinafter  provided. 

The  undersigned  do  hereby  authorize  and  empower  the  said  Bank,  at 
its  option,  at  any  time,  to  appropriate  and  apply  to  the  payment  and  ex- 
tinguishment of  any  of  the  above  named  obligations  or  liabilities,  whether 
now  existing  or  hereafter  contracted,  any  and  all  moneys  now  or  hereafter 
in  the  hands  of  the  said  Bank,  on  deposit  or  otherwise,  to  the  credit  of  or 
belonging  to  the  undersigned,  whether  the  said  obligations  or  liabilities  are 
then  due  or  not  due :  and  further  agree  that  in  the  event  of  the  insolvency 
of  the  undersigned  all  the  said  obligations  and  liabilities  shall,  at  the  option 


120  SMITH'S  FINANCIAL  DICTIONARY. 

of  the  said  Bank,  become  and  be  immediately  due  and  payable  without 
demand  of  payment. 

The  said  Bank  is  Hereby  authorized,  upon  the  non-payment  of  any  of 
the  liabilities  above  mentioned  when  due,  to  sell,  assign  and  deliver  the 
whole  of  the  said  securities,  or  any  part  thereof,  or  any  substitutes  therefor, 
or  any  additions  thereto,  or  any  other  securities  or  property  given  unto  or 
left  in  the  possession  or  custody  of  the  said  Bank  by  or  for  the  under- 
signed, at  any  Broker's  Board  or  at  public  or  private  sale,  at  the  option  of 
the  said  Bank,  without  either  advertisement  or  notice,  which  are  hereby 
expressly  waived. 

If  such  securities  or  property  are  sold  at  public  sale,  the  said  Bank  may 
itself  purchase  the  whole  or  any  part  thereof,  free  from  any  right  of  re- 
demption on  the  part  of  the  undersigned,  which  is  hereby  waived  and  re- 
leased. 

In  case  of  sale  for  any  cause,  after  deducting  all  costs  or  expenses  of 
every  kind  for  collection,  sale  or  delivery,  the  said  Bank  may  apply  the 
residue  of  the  proceeds  of  the  sale  or  sales  so  made,  to  pay  either  one  or 
more  or  all  of  the  said  liabilities  to  the  said  Bank,  whether  then  due  or 
not,  as  it  shall  deem  proper,  making  proper  rebate  for  interest  on  liabilities 
not  then  due,  and  returning  the  overplus,  if  any,  to  the  undersigned  who 
agree  to  be  and  remain  liable  to  the  said  Bank  for  any  deficiency  arising 
upon  such  sale  or  sales. 

(Signed)    

On  the  back  of  the  form  is  printed  the  following  condition : 

In  consideration  of  the  making,  at  the  request  of  the  undersigned,  of 
the  loan  evidenced  by  the  within  note,  upon  the  terms  thereof,  and  of  the 
sum  of  one  dollar,  the  imdersigned,  hereby  guarantee  to  The  Thirty- 
seventh  National  Bank  of  the  City  of  New  York,  its  successors,  in- 
dorsees or  assigns,  the  prompt  payment  of  the  said  loan  when  due,  and 
hereby  consent  that  the  securities  for  the  said  loan  may  be  exchanged 
or  surrendered  from  time  to  time,  or  the  time  of  payment  of  the  said  loan 
or  any  of  the  securities  therefor  extended,  without  notice  to  or  further 
assent  from  the  undersigned,  and  that  the  undersigned  will  remain  bound 
upon  this  guarantee  notwithstanding  such  changes,  surrender  or  extension. 
The  undersigned  waive  demand  of  payment  from  the  maker  of  said 
note,  and  also  waive  notice  of  non-payment  of  the  said  loan  or  note,  and 
also  waive  notice  of  any  sale  of  the  collateral  securities  held  for  the  said 
note. 

A  note  in  the  foregoing  form  is  also  known  as  a  stock  note 
because  the  collateral  provided  consists  of  stocks  (it  may,  how- 
ever, consist  of  bonds  or  partly  of  bonds).  Also,  because 
of  its  stringent  provisions  the  name  "ironclad  note"  is  some- 
times applied  to  it. 

Collateral  trust.  .\  trust  ftmd  or  obligation  secured  by  col- 
lateral. 


SMITHS  I'JNANCIAL  DICTIONARY.  121 

Collateral  trust  bond.  A  bond  which  is  secured  by  collat- 
-eral  held  in  trust. 

A  railroad  requiring  money  may  issue  collateral  trust  bonds 
and  place  in  trust  as  security  for  them  stocks  by  the  owner- 
ship of  which  it  controls  other  railroads. 

Collection.  Same  as  collection  item ;  a  general  name  in 
banking  for  promissory  note,  draft  or  check  which  a  bank  holds 
for  collection  from  another  bank  or  from  an  individual. 

In  general  use  the  term  collection  means  obtaining  pay- 
ment. 

Collection  charge.  A  charge  made  by  banks  for  the  collec- 
tion of  checks,  drafts,  promissory  notes,  etc.,  which  are  pay- 
able (collectable)  in  other  places. 

The  rule  of  the  New  York  Clearing  House  Association, 
which  applies  not  only  to  its  members  but  to  other  banks 
which  clear  through  its  members,  is  that  for  items  collected 
for  the  account  of  or  in  dealings  with  the  governments  of  the 
United  States,  the  state  of  New  York  and  the  city  of  New- 
York  and  for  items  payable  in  the  cities  of  Boston,  Provi- 
dence. Albany,  Troy,  Jersey  City,  Bayonne,  Hoboken,  Newark. 
Philadelphia  and  Baltimore  the  charge  shall  be  discretionary 
with  the  collecting  bank. 

For  items  from  whomsoever  received  (except  on  those  points 
designated  as  discretionary)  payable  at  points  in  Connecticut, 
Delaware,  District  of  Columbia,  Indiana,  Illinois,  Kentucky, 
Maine.  Maryland,  Massachusetts,  Michigan,  Missouri,  New 
Plampshire,  New  Jersey,  New  York,'  Ohio,  Pennsylvania, 
Rhode  Island,  Vermont,  Virginia,  West  Virginia  and  Wis- 
consin the  collecting  banks  shall  charge  not  less  than  i-io  of 
I  per  cent  of  the  amount  of  the  items  respectively. 

For  items  from  whomsoever  received  payable  at  points  in 
Alabama.  Arizona.  Arkansas,  California.  Colorado,  Florida, 
Georgia.  Idaho.  Indian  Territory.  Iowa,  Kansas,  Louisiana, 
Minnesota,  Mississippi.  Montana,  Nebraska,  Nevada,  New 
Mexico,  North  Carolina,  North  Dakota,  Oklahoma,  Oregon, 
South  Carolina,  Sovith  Dakota,  Tennessee,  Texas.  Utah,  Wash- 
ington, Wyoming  and  Canada  the  collecting  banks  shall 
charge  not  less  than  1-4  of  1  per  cent  of  the  amount  of  the 
items  respectively. 


122  SMITH'S  FINANCIAL  DICTIONARY. 

In  case  the  charge  upon  any  item  at  the  rate  above  specified 
does  not  equal  lo  cents  the  collecting  bank  shall  charge  not 
less  than  that  sum ;  but  all  items  received  from  one  party  at 
the  same  time  and  payable  at  the  same  place  may  be  added 
together  and  treated  as  one  item  for  the  purpose  of  fixing  the 
amount  chargeable. 

Collection  item.  Same  as  collection ;  a  general  name  in 
banking  for  a  promissory  note,  draft  or  check  which  a  bank 
holds  for  collection  from  another  bank  or  from  an  individual. 

Collection  note.  A  note  delivered  to  a  bank  by  a  depositor 
in  the  bank  for  collection  the  amount  of  w^hich  is  to  be  cred- 
ited to  the  depositor  w^hen  payment  is  made. 

Colonial  stocks.  The  name  applied  to  the  stocks  (or  bonds) 
of  the  British  colonies. 

Combine.  An  abbreviation  or  contraction  of  the  word  com- 
bination ;  it  applies  to  a  combination  of  separate  concerns  or 
interests  by  an  understanding  or  compact,  as  a  pool  (see 
Pool),  but  not  by  an  actual  consolidation.  To  an  actual  con- 
solidation when  the  purpose  is  to  control  a  particular  industry 
or  business  the  term  trust  is  generally  applied. 

The  term  ring  is  sometimes  mistakenly  used  in  place  of 
combine ;  specifically  ring  refers  to  a  clique  or  coterie  of  per- 
sons  and  not  to  a  combination  of  concerns  or  interests. 

Combine  is  a  newer  term  than  either  ring  or  trust  and  has 
been  rather  loosely  used. 

Coming  out.  The  London  Stock  Exchange  term  for  the 
issuance  of  securities  of  a  new  company  or  the  issuance  of 
new  securities  by  an  old  company.     See  For  the  coming  out. 

Commerce.  The  exchange  of  goods,  products  or  property 
of  any  kind,  especially  such  exchange  on  a  large  scale,  as  be- 
tween states  or  nations ;  extended  trade. 

Commercial.  Of  or  pertaining  to  or  of  the  nature  of  com- 
merce ;  mercantile  ;  employed  in  or  devoted  to  trade  or  com- 
merce. 

Commercial  agency.  Same  as  mercantile  agency ;  a  con- 
cern which  with  the  cooperation  of  merchants,  manufacturers, 
bankers  and  others  ascertains,  records  and  makes  known  to  its 
patrons  or  subscribers  the  financial  standing,  general  busi- 
ness reputation  and  credit  ratings  of  individuals,  firms  and 
corporations  engaged  in  mercantile  and  industrial  enterprises. 


SMITH'S  FINANCIAL  DICTIONARY.  123 

In  addition  it  compiles  reports  on  the  state  of  trade  and  on 
commercial  and  financial  operations  generally,  including  rec- 
ords of  failures,  judgments,  etc. 

Commercial  bar.  This  is  a  bar  (ingot)  of  pure  gold  or 
silver.  The  market  price  of  a  commercial  bar  is  usually  frac- 
tionally lower  than  that  of  a  government  bar  (a  bar  turned  out 
by  a  government  assay  office). 

Commercial  bill  or  commercial  bill  of  exchange.  A  bill 
(draft)  drawn  against  a  shipment  of  products  or  goods ;  that 
is,  a  draft  drawn  upon  the  one  to  whom  the  products  or  goods 
are  consigned.  See  Domestic  exchange ;  also  see  Foreign  ex- 
change. 

Commercial  credit.  An  estimate  of  the  ability  and  dispo- 
sition of  individuals,  firms  or  corporations  to  meet  their  busi- 
ness engagements. 

Commercial  letter  of  credit.  A  commercial  letter  of  credit 
is  an  instrument  issued  by  a  banker  which  authorizes  the 
holder  to  draw  upon  the  issuing  banker  at  sight  or  otherwise 
to  an  amount  not  exceeding  the  amount  named  in  the  letter. 
It  is  stipulated  in  the  body  of  the  instrument  that  the  amount 
of  all  drafts  negotiated  under  it  shall  be  indorsed  on  it  so  that 
it  shall  always  show  how  much  of  the  credit  remains.  The 
names  of  bankers  in  various  parts  of  the  world  (correspondents 
of  the  issuing  banker)  who  will  cash  drafts  so  drawn  are  print- 
ed on  the  letter.  A  considerable  part  of  the  foreign  purchases 
made  by  merchants  is  effected  through  letters  of  credit. 

Commercial  paper.  Negotiable  instruments  calling  for  the 
payment  of  money,  issued  in  the  course  of  business,  as  bills  of 
exchange   (drafts),  promissory  notes,  etc. 

As  generally  interpreted  commercial  paper  means  accept- 
ances (drafts  or  bills  of  exchange  which  have  been  accepted) 
and  promissory  notes.  Under  the  head  commercial  paper 
properly  come  drafts  drawn  against  purchasers  of  merchandise 
or  products  and  promissory  notes  made  by  them  ;  or  drafts 
drawn  against  manufacturers  for  materials  supplied  and  prom- 
issory notes  made  by  them. 

Accommodation  paper  is  included  under  the  head  com- 
mercial paper  when  it  is  made  (in  the  case  of  a  promissory 
note")  or  drawn  (in  the  case  of  a  draft  or  bill  of  exchange)  by 
a  concern  or  individual  for  use  in  mercantile  or  commercial 


iJI  SMITH'S  FINANCIAL  DICTIONARY. 

business.  Accommodation  paper  consists  of  drafts  or  bills  of 
exchange  drawn,  accepted  or  indorsed  or  of  promissory  notes 
made  or  indorsed  without  consideration  by  one  party  to  enable 
another  to  obtain  credit  or  to  raise  money. 

A  promissory  note  that  has  been  received  for  goods  sold 
and  that  has  in  order  to  effect  its  discount  (sale)  been  in- 
dorsed by  the  party  who  received  it  is  known  as  a  bill  receiv- 
able. 

Single-name  paper  is  paper  that  is  not  indorsed;  double- 
name  paper  is  paper  with  an  indorsement. 

Another  designation  for  single-name  paper  is  straight  paper ; 
in  fact  it  is  a  common  practise  to  speak  of  paper  without  in- 
dorsement as  straight  paper. 

Negotiable  drafts  and  notes  by  reason  of  the  fact  that  they 
are  negotiable  are  themselves  articles  of  commerce — articles 
which  may  be  bought  and  sold  the  same  as  commodities.  The 
varieties  of  commercial  paper  are  designated  by  trade  names. 
For  instance,  the  paper  made  (issued)  or  the  paper  indorsed 
and  sold  by  dry  goods  commission  houses  is  known  as  com- 
mission house  paper;  that  made  by  cotton  and  woolen  mills  is 
known  as  mill  paper,  and  so  on. 

Bank  paper  (an  abbreviation  of  bankable  paper)  is  the  name 
applied  to  paper  that  is  of  such  good  quality  that  a  bank  will 
readily  discount  (buy)  it.  Accordingly,  it  also  applies  to 
paper  when  it  bears  the  indorsement  of  a  bank.  The  usual 
manner  in  which  a  bank  becomes  the  indorser  of  commercial 
paper  is  in  rediscounting.  First  it  buys  (discounts)  the  paper 
and  then  it  sells  (rediscounts)  it  if  it  needs  cash  or  if  it  can 
make  a  satisfactory  profit  by  a  sale.  The  paper  brings  a 
better  price  (the  discount  is  less)  with  the  bank's  indorsement 
than  it  would  bring  without  the  bank's  indorsement. 

Commercial  paper  when  in  the  form  of  a  promissory  note 
does  not  as  a  rule  bear  interest.  The  discount  in  the  first  in- 
stance cannot  under  the  law  be  greater  than  the  amount  of 
legal  interest  on  it — that  is  to  say,  the  commercial  paper 
dealer  or  the  bank  which  takes  the  note  from  the  maker  can- 
not deduct  more  than  the  legal  rate  of  interest,  although  the 
dealer  or  bank  may  subsequently  dispose  of  the  paper  at  any 
price  he  or  it  sees  fit. 


SMITH'S  FINANCIAL  DICTIONARY.  125 

The  business  of  buying  and  selling  commercial  paper  is  an 
extensive  one.  Many  individuals  as  well  as  banks  are  en- 
gaged in  it.  Individual  dealers  buy  from  makers  at  one  rate 
of  discount  and  sell  to  banks  or  other  dealers  at  a  lower  rate. 
For  instance,  they  will  buy  at  a  discount  of  5  per  cent  and  re- 
sell at  a  discount  of  4  per  cent;  in  such  an  operation  they  make 
a  profit  of  i  per  cent.     Banks  also  resell  to  other  banks. 

If  negotiable  commercial  paper  pledged  to  a  bank  as  secu- 
rity for  a  loan  or  debt  falls  due  and  the  bank  fails  to  present  it 
for  payment  and  to  have  it  protested  if  dishonored  the  bank 
is  liable  to  the  owner  for  the  full  amount  of  the  paper. 

Sometimes  the  owner  of  commercial  paper  has  the  right  to 
demand  payment  before  maturity,  as,  for  instance,  when  a 
draft  has  been  protested  for  non-acceptance  and  proper  notice 
has  been  served  the  holder  may  proceed  against  the  drawer 
and  indorsers. 

It  is  a  common  practise  of  merchants  to  make  out  notes 
payable  to  themselves  and  have  them  discounted.  There  is 
often  a  profit  in  such  a  transaction.  They  may  be  able  to 
have  their  paper  discounted  at  4  per  cent,  or  in  other  words, 
may  be  al^le  to  sell  it  at  a  discount  of  4  per  cent  and  with  the 
cash  thus  obtained  may  be  able  to  discount  their  own  bills  at 
5  per  cent,  by  which  is  meant  that  by  paying  cash  for  the 
goods  they  purchase  they  may  be  able  to  secure  a  discount  of 
5  per  cent.  In  such  a  case  there  is  a  profit  of  i  per  cent  in  hav- 
ing their  own  paper  discounted  and  discounting  their  own 
bills. 

The  Bank  of  France  requires  three  names  to  paper;  the  Im- 
perial Bank  of  Germany  requires  two  names. 

Commercial  traveler.  An  agent  or  representative  of  a 
mercantile  or  manufacturing  concern  who  travels  and  solicits 
orders.  A  colloquial  name  for  a  commercial  traveler  is 
drummer. 

Commission.     A  fee  for  services  in  buying  and  selling. 

The  commission  charged  by  a  broker  on  the  New  York 
Stock  Exchange  for  executing  an  order  is  1-8  of  i  per  cent  of 
the  par  value  of  the  securities  for  a  sale  and  the  same  for  a 
purchase,  or  as  it  is  commonly  expressed,  1-8  each  way.  For 
a  round-trade  (buying  and  then  selling,  or  the  reverse,  selling 
and  then  buying)  the  commission  on  100  shares  of  stock    or 


126  SMITH'S  FINANCIAL  DICTIONARY. 

$10,000  of  bonds  is  1-4  of  i  per  cent  or  $25  (1-8  of  i  per  cent 
or  $12.50  each  way). 

Also  see  Three  and  a  shilling ;  also  see  Two-dollar  broker. 

Outside  brokers  in  stocks  have  no  fixed  commissions,  al- 
though their  charges  are  usually  the  same  as  those  of  mem- 
bers of  the  New  York  Stock  Exchange.  Brokers  in  the  out- 
side (curb)  market  often  take  an  order  net,  which  means  that 
the  customer  will  deliver  or  receive  the  stock,  as  the  case  may 
be,  at  a  fixed  price.  The  broker  receives  no  commission  but 
is  allowed  to  make  as  much  on  the  transaction  for  himself  as 
he  can. 

The  commission  on  mining  stocks,  except  on  the  New  York 
Stock  Exchange,  is  based  on  the  market  value  of  the  stocks. 

Commissions  for  round  trades  (both  buying  and  selling,  or 
the  reverse,  selling  and  buying)  in  commodities  are:  Grain, 
1-4  of  I  cent  per  bushel  or  $12.50  on  5,000  bushels;  lard,  5 
cents  per  tierce  or  $12.50  on  250  tierces  (85,000  pounds)  ; 
pork,  5  cents  per  barrel  or  $12.50  on  250  barrels;  short  ribs, 
2  1-2  cents  per  1,000  pounds  or  $12.50  on  50,000  pounds; 
cotton,  10  cents  per  bale  or  $10  on  100  bales  (50,000  pounds)  ; 
coffee,  8  cents  per  bag  or  $20  on  250  bags  (32,500  pounds)  ; 
silver  bullion,  1-4  of  i  cent  per  ounce   or  $2.50  on  1,000  ounces. 

The  word  commission  also  means  an  order  or  an  act  en- 
trusted to  a  broker  (or  agent)  to  execute  or  perform,  but  the 
word  invariably  used  is  order. 

On  the  London  Stock  Exchange  no  fixed  commission  is 
charged,  but  1-8  per  cent  each  Avay  (1-8  for  buying  and  the 
same  for  selling)  is  the  customary  charge  on  stock  (as  dis- 
tinguished from  shares ;  see  Stock)  when  no  commission  is 
charged  for  carrying  over.  On  shares  the  commission  varies 
according  to  the  price.  Active  speculative  accounts  when 
opened  and  closed  during  a  fortnightly  period  are  sometimes 
undertaken  for  t-t6  each  way.  .The  charge  for  carrying  over 
bargains  is  usually  one-half  the  amount  charged  for  opening 
them ;  when  a  carry-over  commission  is  charged  the  bar- 
gain is  generally  closed  without  charge. 

On  the  Paris  Bourse  the  commission  is  fixed  at  about  1-8 
per  cent  each  way. 

Commission  broker.  One  who  executes  orders  for  a  com- 
mission. 


SMITH'S  FINANCIAL  DICTIONARY.  127 


Commission  house.  A  brokerage  house  which  deals  only 
for  customers  and  does  not  speculate  for  its  own  account. 

Commission  merchant.  One  employed  to  sell  goods  for 
another  on  commission ;  sometimes  called  factor  or  consignee. 

Commitment.  An  act  of  engagement  or  pledging;  the  act 
of  giving  an  order  to  buy  or  sell,  as  stocks. 

Committee  for  general  purposes.  The  general  governing 
body  of  the  London  Stock  Exchange,  consisting  of  30  persons, 
who  are  elected  on  March  25  each  year  by  the  members  of  the 
exchange. 

Commodity.  An  article  of  trade.  Grain,  cotton  and  coffee 
are  commodities. 

Common  carrier.  A  railroad  or  steamship  line  or  any  carry- 
ing company  which  transports  goods  for  hire. 

Common  stock.  Stock  not  preferred  as  to  dividends  or 
assets  ;  sometimes  called  general  or  ordinary  stock. 

In  Great  Britain  when  an  ordinary  (common)  stock  has 
been  divided  into  two  parts  one  part,  called  deferred,  receives 
no  dividend  until  the  other  part,  called  preferred,  has  received 
a  dividend  at  a  fixed  rate.  The  deferred  stock  is  called  A 
stock    and  the  preferred  stock  is  called  B  stock. 

This  B  or  preferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called  pre- 
ferred stock  is  in  Great  Britain  called  preference  stock  and 
preference  stock  in  Great  Britain  ma)^  be  divided  into  two 
or  more  classes  called  first  preference,  second  preference,  etc., 
just  as  preferred  stock  in  the  United  States  may  be  divided 
into  two  or  more  classes  called  first  preferred,  second  pre- 
ferred, etc.  When,  however,  there  is  but  one  class  of  prefer- 
ence stock  ahead  of  an  ordinar}^  stock  in  Great  Britain  the  B 
or  preferred  stock  is  equivalent  to  second  preferred  stock  in 
the  United  States. 

Community  of  interest.  This  term  means  joint  ownership 
or  joint  control  for  the  purpose  of  maintaining  harmonious 
relations. 

When,  for  instance,  one  set  of  capitalists  in  control  of  one 
railroad  acquire  an  interest  in  a  competing  railroad  with  rep- 
resentation in  its  board  of  directors  and  the  set  of  capitalists 
in  control  of  this  second  railroad  acquire  an  interest  in  the 
other  railroad    with  representation  in  its  board  of  directors, 


T28  SMITH'S  FINANCIAL  DICTIONARY. 

with  the  object  of  mutual  benefit,  a  community  of  interest  is 
established.  Also,  when  two  competing  railroads  together 
acquire  control  of  a  third  line  connecting  with  both  a  com- 
munity of  interest  is  established  if  the  object  be  mutual  benefit. 

Commutation  or  commuting.  Same  as  compounding;  the 
payment  of  several  successive  obligations  by  substituting  a 
lump  sum. 

Company.  In  the  ordinary  acceptation  of  the  word  com- 
pany (referring  to  a  joint-stock  company)  means  the  same  as 
corporation.  A  business  company  (corporation)  is  an  artifi- 
cial body,  created  by  law,  composed  of  individuals  united  under 
a  common  name,  wnth  power  of  succession,  so  that  changes  in 
the  individuals  composing  it  do  not  afifect  the  body  itself ;  in 
law  it  is  treated  as  a  person. 

The  capital  stock  of  a  company  (that  is,  a  joint-stock  com- 
pany) is  divided  into  shares  of  equal  amount,  as,  for  instance, 
a  company  whose  capital  stock  of  $100,000,000  is  divided  into 
shares  of  $100  each. 

If  the  financial  statement  of  a  stock  company  is  published 
in  such  form  as  to  misrepresent  its  real  condition  any  one 
who  is  misled  to  his  damage  may  recover  his  loss  from  the 
directors  whether  he  is  a  stockholder  or  not. 

In  Great  Britain  a  distinction  is  made  between  stock  and 
shares ;  see  Stock. 

Company  meeting.  English  designation  for  a  meeting  of 
the  shareholders  (stockholders)  of  a  company. 

Comparison.  At  the  close  of  business  on  the  New  York 
Stock  Exchange  messengers  employed  by  brokers  compare 
the  day's  transactions.  If  A  sells  100  shares  of  stock  to  B 
A's  messenger  delivers  at  the  office  of  B  a  memorandum  of 
the  transaction,  which  is  called  a  deliver  ticket,  and  obtains 
acknowledgment  on  another  corresponding  memorandum, 
which  is  called  a  receive  ticket.  It  is  the  duty  of  the  seller  to 
compare  or  to  endeavor  to  compare  each  transaction  at  the 
office  of  the  buyer  not  later  than  one  hour  after  the  closing  of 
the  exchange.  It  is  the  duty  of  the  buyer  to  investigate  be- 
fore 10  a.  m.  of  the  day  after  the  purchase  any  transaction 
which  has  not  been  compared  by  the  seller. 

Compensatory  damages.  The  amount  adjudged  as  equiva- 
lent to  the  loss  sustained. 


SMITH'S  FINANCIAL  DICTIONARY.  129 

Composition.  An  agreement  between  a  debtor  and  his  cred- 
itors by  whicTi  the  latter  accept  in  full  payment  of  their  claims 
a  portion  of  the  amounts  due.  The  sum  or  rate  paid  or 
agreed  to  be  paid  in  compounding  with  creditors  also  is  called 
composition. 

A  composition  agreement  is  strictly  interpreted  by  the 
courts.  For  instance,  A  owes  B  $100  and  says  to  him,  "If  you 
will  release  that  debt  I  will  pay  you  $10  a  week  for  the  next 
five  weeks."  B  agrees.  If  A  fails  to  make  the  payment  in  any 
one  of  the  five  weeks  B  is  no  longer  bound  by  his  agreement. 
He  may  rescind  the  agreement  immediately  and  sue  for  so 
much  of  the  $100  as  he  has  not  received  in  the  weekly  instal- 
ments, which  if  kept  up  would  have  discharged  the  debt  for  $50. 

Composition  deed.  An  agreement  between  a  debtor  and 
his  creditors  effecting  a  composition  or  compromise,  usually  in 
a  manner  w^hich  binds  the  creditors  not  to  molest  the  debtor. 

Compound  arbitration  of  exchange.  A  calculation  based 
on  the  rates  of  exchange  between  four  or  more  places  to  de- 
termine the  difference  in  the  money  values  of  the  different 
countries ;  or,  a  calculation  based  on  the  money  values  of  four 
or  more  places  to  determine  the  ratio  of  exchange  between  the 
different  places.  When  only  three  places  are  involved  in  the 
calculation  it  is  called  simple  arbitration  of  exchange. 

For  additional  information  see  Arbitration  of  exchange. 

Compounding.  Same  as  commuting  or  commutation ;  the 
payment  of  several  successive  obligations  by  substituting  a 
lump  sum. 

Compounding  differences.  Settling  a  contract  without  ex- 
ecuting its  complete  terms.  For  example,  A  buys  too  shares 
of  stock  at  100  from  B,  the  stock  to  be  delivered  in  30  days. 
At  the  end  of  30  days  the  price  of  the  stock  is  98  and  A  pays 
B  $200  instead  of  taking  the  stock. 

Compound  interest.  Interest  on  interest  after  it  has  be- 
come due  and  has  been  added  to  the  principal. 

The  interest  on  deposits  in  savings  banks,  for  instance,  is 
computed  at  regular  intervals  and  added  to  the  principal  and 
then  interest  continues  on  the  whole.  Many  cammercial 
banks  alloAv  interest  on  daily  balances  and  thus  as  interest  is 
computed  it  is  added  to  the  principal. 

Compound  interest  is  not  sanctioned  by  law  in  New  York 


130  SMITH'S  FINANCIAL  DICTIONARY. 

state  except  by  express  agreement  and  the  agreement  must 
be  made  after  the  simple  interest  has  accrued  and  upon  a 
new  consideration.  The  correct  method  in  a  case  of  payment 
by  instahnent  is  by  what  is  known  as  Chancellor  Kent's  rule: 
"When  partial  payments  have  been  made,  apply  the  payment, 
in  the  first  place,  to  the  discharging  of  the  interest  then  due. 
If  the  payment  exceeds  the  interest,  the  surplus  goes  towards 
discharging  the  principal,  and  the  subsequent  interest  is  to  be 
computed  on  the  balance  of  the  principal  remaining  due.  If 
the  payment  be  less  than  the  interest  the  surplus  of  interest 
must  not  be  taken  to  augment  the  principal,  but  the  interest 
continues  on  the  former  principal  until  the  period  when  the 
payments,  taken  together,  exceed  the  interest  due,  and  then 
the  surplus  is  to  be  applied  towards  discharging  the  principal, 
and  interest  is  to  be  computed  on  the  balance  as  aforesaid." 

A  compound  interest  table  showing  the  accumulation  of 
principal  and  interest  on  $i  is  printed  on  the  two  succeeding 
pages,  the  interest  being  compounded  (or  added  to  the  prin- 
cipal) semi-annually. 


SMITirS  fINANCIAL  DICTIONARY. 


131 


COMPOUND  INTEREST  TABLE. 

Interest  compounded  semi-annually. 

Table  continued  on  next  page. 


Number  of  Years. 


1  iicr 
cenl. 


'.'  |icr 


3  per 
ceut. 


4  per 
cent. 


4'i  jier 
cent. 


I 
2 

3 

4 

S_ 

6 

7 
8 

9 
10 


$1.0100 
1. 020 1 
1.0303 
1.0407 
i.osii 


$1.0201 
1 .0406 
1.061S 
1.0828 
r.io4S 


$1.0302 
1.0613 

1-0934 
I. 1264 
1. 1605 


$1.0404 
1 .0824 
1.1261 

1-1715 
1.2188 


$1-0455 
1.0930 

1. 1438 
1. 1948 
1. 2481 


$1.0616 
1.0723 
1.0830 
1.0949 
1J059 


I     $1.1267 

I       1-1494 

I       1-1725 

1.1961 

1. 2201 


$1.1956 
1.2317 
1.2689 
1-3073 
1-3463 


$1.2681 

1-3193 
1.3726 
1. 4281 
1.4858 


$1.3004 

1-3643 
1.4264 

I -4913 
1-5592 


II 

12 

13 

14 

i5_ 

16 

17 
18 

19 
20 


$1.1170 
1.1281 

I -1394 
1. 1508 
1. 1623 


$1.2446 
1 .2696 
1.2952 
1.3212 
1-3478 


$1.3875 
1.4295 
1.4727 
1.5172 
1-5630 


1-5458 

$1.6301 

1.6082 

1.7044 

1.6732 

1.7820 

1.7408 

1. 863 1 

I.8III 

1.9479 

$1.1740 

i-i8s7 
I. 1976 
1.2096 
1.2218 


$1.3748 
1.402s 

1-4307 
1.4594 
1.4888 


$1.6103 
1.6589 
1. 7091 
1.7607 
1.8140 


$1.8843 
1.9604 
2.0396 
2.1220 
2.2078 


$2.0365 
2.1272 
2.2240 
2.3252 
2.4310 


21 

22 

22, 

24 

?5_ 

26 

27 

28 

29 

30_ 

31 

32 

Z2 

34 

35_ 

36 

2>7 

38 

39 
40_ 

41 

42 

43 

44 

45_ 

46 

47 

48 

49 

50 


$1.2341 
1.2465 
1.2590 
1.2716 
1.2843 


$1.5187 
1.5492 
1.5804 
I.6121 
1.644s 


$1.8686 
1.9253 

1.9835 
2.0434 
2.1052 


$2.2970 
2.3898 
2.4863 
2.5868 
2.6913 


$2.5415 
2.6572 
2.7781 
2.9045 
:i02,67 


$1.2973 
1-3103 
1.3235 
1.3367 
1.3501 


$1.6776 
1.7113 

1.7457 
1.7808 
1.8166 


$2.1688 
2.2344 
2.3019 

2.3715 
2.4432 


$2.8006 
2.9131 
30318 

3-1543 
3.2818 


$3.1749 
3-3193 
3-4703 
3.6282 

3-7933 


$1-3637 
1-3773 
1.3911 
1.405 1 
1. 41 92 


$1-8430 
1.8800 
1. 91 76 
1.9562 
1-9955 


$2.5170 

2.5931 
2.6715 
2.7522 
2.8354 


$3-4144 
3-5523 
3.6958 

3.8451 
4.0005 


$3.9660 
4-1465 
4-3351 
4-5324 
4-7387 


$1-4334 
1.4478 
1.4623 
1.4770 
1.4918 


$2.03  !;6 
2.0765 
2.  II 83 
2.1608 
2.2043 


$2.9211 
3.0094 
3.1004 

3-1941 
3.2907 


$4.1621 
4-3302 
4-5052 
4.6872 
4.8766 


$4-9543 
5-1798 
5-4146 
5.6610 
59288 


$1.5067 
1.5218 
I -537 1 
1-5545 
1. 5701 


$2.2486 
2.2938 

2.3399 
2.3869 

2-4349 


$3-3901 
3.4926 
3-5982 
3-7070 
3-8191 


$5-0736 

5-2785 
5.4928 

57147 
5-9456 


$6.1986 
6.4807 
6.7756 
7.0840 
7.4062 


$1.5858 
1.6017 
1.6178 
1.6330 
1.6494 


$2.4838 
2.5338 

2-5847 
2.6367 
2.6897 


$3-9345 
4.0432 

4-1655 
4.2914 
4.421 1 


$6.1858 

6-4357 
6.6957 
6.9662 
7-2477 


$7-7430 
8.0954 
8.4638 
8.8490 
9.2516 


13^ 


SMITH'S  FINANCIAL  DICTIONARY. 


COMPOUND  INTEREST  TABLE. 

Interest  compounded  semi-annually. 

Table  continued  from  preceding  page. 


Number 

f\t' 

5  per 

6  per 

7  per 

7  .'5-10  per 

S  per 

10  per 

Years. 

cent. 

cent.. 

cent. 

cent. 

cent. 

rent. 

I  .  .  .  . 

$1.0506 

$1.0609 

$1.0712 

$1.0743 

$1.0816 

$1.1025 

2  .  .  .  . 

1. 1028 

I. 1255 

1. 1475 

1.1530 

1. 1692 

I-2IS5 

3  •••• 

1. 1596 

I. 1940 

1.2292 

1.2387 

1.2646 

1.3400 

4 

1. 2184 

1.2667 

I.3168 

1.3308 

1.3678 

1.4773 

5  ■••• 

1.2800 

1-3439 

I.4105 

1.4298 

1.4794 

1.6287 

6  ...  . 

$1.3448 

$1.4257 

$1.5110 

$1.5360 

$1.6002 

$1-7957 

7  .... 

1. 4129 

1.5125 

1. 6186 

1.6502 

1.7307 

1-9747 

8  .... 

1.4845 

1.6047 

1-7339 

1.7729 

1.8720 

2.1827 

9 

1.5596 

1.7024 

1.8574 

1.9047 

2.0247 

2.4064 

10 

1.6385 

1. 8061 

1.9897 

2.0462 

2.1899 

2.6530 

II 

$1.7234 

$1.9161 

$2.1315 

$2.1982 

$2.3687 

$2.9250 

12  .... 

1.8086 

2.0326 

2.2833 

2.3617 

2.5619 

3.2248 

13  •••• 

1. 9001 

2.1564 

2.4459 

2.5372 

2.7710 

3-5553 

14  .... 

1.9963 

2.2878 

2.6201 

2.7258 

2.9971 

3-9198 

15  .... 

2.0933 

2.4:271 

2.8068 

2.9284 

32417 

43216 

i6  .... 

$2.2027 

$2.5749 

$3.0067 

$3.1461 

$3.5062 

$4-7645 

17  .... 

2.3142 

2.73T-7 

3.2208 

3-3800 

3-7923 

5-2529 

i8  .... 

2.4313 

2.8981 

3.4502 

3.6312 

4.IO18 

5-7883 

19  . ... 

2.5544 

3.0746 

3.6960 

3.901 1 

4.4365 

6.3816 

20  .... 

2.6837 

3-2618 

3-9592 

4.I9II 

4.7985 

7.0362 

21  .... 

$2.8196 

$3.4605 

$4.2412 

$4.5026 

$5.1900 

$7-7574 

22 

2.9624 

3.6712 

4-5433 

4.8373 

5-6136 

8-5525 

23  •  .  •  • 

3.II23 

3-8948 

4.8669 

5.1969 

6.0716 

9.4292 

24  .... 

3.2699 

4.1320 

5-2136 

5-5832 

6.5670 

10.3957 

25  .... 

3-4354 

4-3836 

S.5849 

5-9982 

7.1030 

11.4612 

26  .... 

$3.6094 

$4.6506 

$5.9827 

$6.4441 

$7.6826 

$12.6359 

27  .... 

3.7921 

4.9338 

6.4088 

6.9231 

8.3094 

13-9311 

28  .... 

3-9841 

5-2343 

6.8653 

7.4377 

8.9875 

15-3591 

29  .... 

4-1858 

5-5531 

7.3543 

7.9906 

9.7208 

16.9334 

30  .... 

4.3977 

5.8913 

7.8781 

8.5846 

10.5143 

18.6691 

31  .... 

$4.6203 

$6.2500 

$8.4391 

$9.2227 

$11.3742 

$20.5827 

32  .... 

4-8542 

6.6307 

9.0402 

9.9087 

12.3024 

22.6924 

33  • • • . 

5-0999 

7-0345 

9.6841 

10.6453 

13.3062 

25.0184 

34  ■  .  •  . 

5-3581 

7.4629 

10.3738 

11.4366 

14.3920 

27.5828 

35  ■■■■ 

5-6294 

7-9174 

11.1126 

12.2867 

15.5664 

30.4081 

36  .... 

$5-9144 

$8.3996 

$11.9041 

$13.2000 

$16.8367 

$33.5249 

37  ■■■■ 

6.2138 

8.91 1 1 

12.7620 

I4.181I 

18.2105 

36.9612 

38  ...  . 

6.5284 

9.4538 

13.6709 

15.2353 

19-6965 

40.7497 

39  • • ■ . 

6.8589 

10.0295 

14.6446 

16.3677 

21.3038 

44.9266 

40  .... 

7.2061 

10.6403 

15.6877 

17.5844 

23.0422 

49.5316 

41  .... 

$7-5709 

$11.2883 

$16.8050 

$18.8915 

$24.9224 

$54.6086 

42  .... 

7-9542 

11.9758 

18.0020 

20.2956 

26.9561 

60.2059 

43  • • • • 

8.3569 

12.7051 

19.2842 

21.8043 

29.1857 

66.3771 

44 

8.7800 

13.8832 

20.6577 

23.4250 

31.5348 

73.1807 

45  ..•• 

9-2245 

14.7287 

22.1290 

25.1663 

34.1080 

80.6817 

46  ... . 

$9.6915 

$15-6257 

$23.7052 

1  $27.0369 

$36.8813 

$88.9516 

47  .  •  ■  . 

10.1822 

16.5773 

25-393':' 

1   29.0466 

39.8908 

98.0692 

48  ... . 

10.6967 

17.5868 

27.2022 

31.2057 

43.1459 

107.1213 

49 

11.2383 

18.6597 

29.1397 

33.5253 

46.6666 

118.1012 

50 

II.  80-72 

19.7941 

31.2141 

36.0154 

50.4746 

130.2066 

SMITH'S  FINANCIAL  DICTIONARY.  133 

Compound  interest  note.  A  legal  tender  note  issued  by  the 
government  in  the  War  of  the  Rebellion.  It  was  payable  in 
three  years  with  interest  at  6  per  cent,  compounded  semi- 
annually, the  interest  being  payable  with  the  principal  at 
maturity.  The  ten-dollar  note,  which  was  the  smallest  issued, 
was  worth  $11.94  at  maturity. 

Compound  option.  London  Stock  Exchange  name  for  the 
call  of  more,  the  put  of  more  or  the  put  and  call  when  com- 
bined. Another  name  is  double  option.  In  New  York  a  put 
and  call  combined  are  called  a  spread  if  two  prices  are  named 
in  it  (a  put  price  and  a  call  price)  or  a  straddle  if  only  one  price 
is  named  in  it  (at  which  price  the  stock  may  be  either"  put  or 
called). 

Comprador.  Native  commission  merchant  and  intermedi- 
ary for  a  foreign  business  house  in  China    or  Japan. 

Comptroller  of  the  Currency.  The  government  official  who 
has  control  of  the  national  banks.  National  bank  examiners 
are  his  representatives  in  the  various  districts  to  which  they 
are  assigned. 

For  details  of  the  authority  and  duties  of  the  Comptroller  of 
the  Currency  see  National  bank  act. 

Computing.     Ascertaining  by  mathematical  calculation. 

Computing  a  bill  (bill  of  exchange  or  draft  or  a  promissory 
note)  consists  in  calculating  the  day  on  which  it  will  become 
due. 

Concession.  A  term  applied  to  a  grant  of  land  or  privi- 
leges by  a  government  to  an  individual  or  to  a  private  con- 
cern which  is  to  build  a  railroad,  prosecute  mining  operations, 
develop  an  industry  or  carry  out  some  undertaking  for  the 
public  as  well  as  for  private  benefit. 

Concessionaire.  An  individual  or  a  concern  who  or  which 
obtains  a  concession  ;  see  Concession. 

Condition.  State,  as  good  condition  (state)  or  bad  condi- 
tion (state)  ;  also  terms,  as  the  conditions  (terms)  of  a  con- 
tract. 

For  the  meaning  of  the  term  condition  as  applied  to  the 
crops  see  Government  crop  report. 

Conditional  indorsement.  A  conditional  indorsement  con- 
tains some  condition  to  the  indorser's  liability. 


iS4  SMITH'S  FINANCIAL  DICTIONARY. 

Condition  of  sale.  Terms  of  sale;  terms  upon  which  the 
vendor  of  property  proposes  to  sell  it. 

Conducting  transportation.  Under  this  head  in  the  report 
of  a  railroad  company  is  included  all  expenses  in  the  trans- 
portation of  freight  and  passengers. 

Confession  of  judgment.  Said  when  the  debtor  admits  the 
debt  and  concurs  in  the  obtaining  of  a  judgment  against  him. 

Confidence  game.     A  term  applied  to  a  swindling  operation. 

Confirmation.  An  instrument  supplying  some  defect  or 
omission  in  a  contract  thereby  making  it  good. 

Confirmatory  meeting.  English  term  for  a  meeting  of  the 
shareholders  (stockholders)  of  a  company  to  confirm  resolu- 
tions passed  at  a  previous  meeting. 

Confirmed.  Corroborated.  An  order  given  verbally  or  by 
telephone  to  a  stock  broker,  for  instance,  is  confirmed  by  re- 
peating the  order  in  writing.  Or,  an  order  sent  from  a  stock 
broker's  office  to  the  broker  on  the  floor  of  the  exchange 
through  a  telephone  operator  at  the  exchange  is  confirmed 
when  the  broker  puts  himself  in  direct  communication  with 
the  office  and  receives  a  repetition  of  the  order. 

Consideration.  Money,  property  or  services  given  by  one 
party  to  a  contract  in  return  for  the  promise  of  some  specific 
future  performance  or  fulfilment  by  the  other  party. 

It  is  a  common  habit  to  designate  the  mone)^  paid  for  a 
thing  as  the  consideration  for  it. 

Consideration  is  a  legal  term  used  in  England  to  designate 
the  sum  mentioned  in  a  transfer  deed  as  paid  for  the  stock  or 
shares  transferred. 

Consignee.  The  party  to  whom  goods  are  sent  (con- 
signed).    Also  see  Consignment. 

Consignment.  The  designation  for  goods  forwarded  which 
are  to  be  sold  by  the  receiver  of  them  (who  is  the  consignee) 
for  the  benefit  of  the  owner  (who  is  the  consignor). 

Merchants  or  manufacturers  who  wish  to  introduce  goods 
iii  a  market  often  send  a  consignment  and  the  goods  are  sold 
at  the  best  price  they  will  command  in  order  to  bring  them  to 
the  attention  of  buyers. 

The  term  also  is  commonly  applied  to  any  shipment  of 
goods. 


SMJTH-S  FINANCIAL  DICTIONARY.  i35 


Consignor.  The  party  who  forwards  goods — the  sender. 
Also  see  Consignment. 

Consol.  An  abbreviation  or  contraction  for  consolidated 
stock   or  bond. 

The  stock  representing  the  consolidation  of  the  funded  debt 
of  Great  Britain  is  called  consols.  A  large  part  of  the  public 
debt  of  Great  Britain,  nine  separate  loans,  being  in  the  form 
of  annuities,  was  consoHdated  in  a  3  per  cent  stock  (or  bond) 
in  175 1.  In  1888  the  3  per  cents  were  converted  into  2  3-4  per 
cents  with  the  provision  that  in  1903  the  rate  should  be  re- 
duced to  2  1-2  per  cent.  The  price  of  consols  is  regarded  as 
the  gage  of  the  national  credit  of  Great  Britain.  The  official 
name  of  consols  is  consolidated  annuities. 

Consolidated  annuity.     See  Consol. 

Consolidated  bond.  A  bond  in  an  issue  created  to  refund 
(take  up  and  replace)  two  or  more  previous  issues ;  some- 
times called  unified  bond. 

Consolidated  mortgage.  A  mortgage  taking  the  place  of 
two  or  more  mortgages  previously  existing ;  sometimes  called 
unified  mortgage. 

Consolidated  Stock  and  Petroleum  Exchange  of  New  York. 
This  exchange  was  created  in  1885  by  an  amalgamation  of  the 
New  York  Petroleum  Exchange  and  Stock  Board  and  New- 
York  ]\Iining  Stock  and  National  Petroleum  Exchange.  On 
this  exchange  dealings  are  conducted  in  the  leading  stocks 
dealt  in  on  the  New  York  Stock  Exchange. 

Constant.  In  a  financial  calculation  constant  means  a  fixed 
value,  as  the  gold  constant. 

Constitution.  The  organic  or  fundamental  law  of  any  or- 
ganized body,  as,  for  instance,  the  constitution  of  the  New 
York  Stock  Exchange. 

Construction  account.  This  account  in  the  case  of  a  rail- 
road represents  the  capital  invested  in  the  road  and  equip- 
ment. 

Contango.  London  Stock  Exchange  term,  meaning  the 
charge  paid  by  the  buyer  for  the  privilege  of  continuing  his 
bargain   (contract)   to  the  next  fortnightly  settlement. 

Examples:  1-8  to  1-4  contango  means  that  the  bull  (who 
is  long)  pays  to  the  jobber  1-4  per  cent  for  the  accommodation 
and  the  bear  (who  is  short)  receives  from  the  jobber  1-8  per 


136  SMITH'S  FINANCIAL  DICTIONARY. 

cent.  1-8  contango  to  i-8  back  (abbreviation  for  backwarda- 
tion) means  that  the  bull  pays  i-8  per  cent  and  the  bear  pays 
1-8  per  cent.  i-i6  contango  to  even  means  that  the  bull  pays 
i-i6  per  cent  and  the  bear  carries  over  at  even,  or  in  other 
words,  pays  nothing.  For  additional  information  see  Settle- 
ment, The. 

Contango  day.  Same  as  continuation  day  or  making-up 
day ;  the  first  day  of  the  settlement  on  the  London  Stock  Ex- 
change when  arrangements  are  made  to  continue  bargains 
(contracts).     For  additional  information  see  Settlement,  The. 

Continental  bill.  A  bill  of  exchange  payable  on  the  Conti- 
nent of  Europe.  Dealers  in  quoting  exchange  name  prices 
for  sterling  bills  (which  usually  are  payable  in  London)  and 
Continental  bills  (which  may  be  payable  in  either  Paris,  Ber- 
lin, Vienna  or  Amsterdam  or  at  some  other  place  on  the  Con- 
tinent). 

Continental  markets.  Paris,  Berlin  and  Antwerp  are  gen- 
erally understood  to  be  meant  when  the  Continental  markets 
are  spoken  of. 

Contingent  damages.  Damages  that  may  be  sustained  the 
extent  of  which  cannot    at  the  time   be  determined. 

Contingent  interest.  An  interest  that  is  dependent  on  the 
outcome  of  a  speculation    or  venture    or  undertaking. 

Contingent  liabilities.  Liabilities  that  may  be  entailed  the 
extent  of  which  cannot    at  the  time   be  determined. 

Continuation  day.  Same  as  contango  day  or  making-up 
day ;  the  first  day  of  the  settlement  on  the  London  Stock  Ex- 
change when  arrangements  are  made  to  continue  bargains 
(contracts).     For  additional  information  see  Settlement,  The. 

Continued  bond.  A  bond  which  is  not  required  to  be  pre- 
sented for  redemption  at  maturity  but  which  may  be  held  for 
a  further  indefinite  period  at  the  same  rate  of  interest  or 
perhaps  at  a  different  rate. 

Continuing  account.  Same  as  current  or  open  or  running 
account ;  an  account  that  continues  and  in  which  a  settlement 
IS  made  at  intervals,  as  every  30  days,  60  days  or  twelve 
months. 

Continuing  agreement.  An  agreement  entered  into  by  a 
borrower  with  the  bank  or  other  lender  from  which  or  whom 
he  rcgularlv  borrows  monev  on  call.     Tt  obviates  the  making 


SMITH'S  FINANCIAL  DICTIONARY.  137 

of  a  special  or  separate  note  each  time  a  loan  is  effected.     It 
contains  all  the  usual  provisions  safeguarding  the  lender. 

The  form  of  continuing  agreement  in  use  in  New  York  fol- 
lows: 

Know  all  Men  by  these  Presents,  That  the  undersigned,  in  considera- 
tion of  financial  accommodations  given,  or  to  be  given,  or  continued  to 
the  undersigned  by  THE  TWENTY-NINTH  NATIONAL  BANK  OF 
'JT-TE  CITY  OF  NEW  YORK,  hereby  agree  with  the  said  Bank  that 
whenever  the  undersigned  shall  become  or  remain,  directly  or  contingently, 
indebted  to  the  said  Bank  for  money  lent,  or  for  money  paid  for  the  use  or 
account  of  the  undersigned,  or  for  any  overdraft  or  upon  any  mdorse- 
ment.  draft,  guarantee  or  in  any  other  manner  whatsoever,  or  upon  any 
other  claim,  the  said  Bank  shall  then  and  thereafter  have  the  following 
rights,  in  addition  to  those  created  by  the  circumstances  from  which  such 
indebtedness  maj^  arise  against  the  undersigned,  or  his,  or  their  executors, 
administrators  or  assigns,  namely: 

>  I.  All  securities  deposited  by  the  undersigned  with  said  Bank,  as  col- 
lateral to  any  such  loan  or  indebtedness  of  the  undersigned  to  said  Bank, 
shall  also  be  held  by  said  Bank  as  security  for  any  other  liability  of  the 
undersigned  to  said  Bank,  whether  then  existing  or  thereafter  contracted; 
and  said  Bank  shall  also  have  a  lien  upon  any  balance  of  the  deposit  account 
of  the  undersigned  with  said  Bank  existing  from  time  to  time,  and  upon 
all  property  of  the  undersigned  of  every  description  left  with  said  Bank  for 
safe  keeping  or  otherwise,  or  coming  to  the  hands  of  said  Bank  in  any  way, 
as  security  for  any  liability  of  the  undersigned  to  said  Bank  now  existing 
or  hereafter  contracted. 

2.  Said  Bank  shall  at  all  times  have  the  right  to  require  from  the 
undersigned  that  there  shall  be  lodged  with  said  Bank  as  security  for  all 
existing  liabilities  of  the  undersigned  to  said  Bank,  approved  collateral 
securities  to  an  amount  satisfactory  to  said  Bank ;  and  upon  the  failure  of 
the  undersigned  at  all  times  to  keep  a  margin  of  securities  with  said  Bank 
for  such  liabilities  of  the  undersigned,  satisfactory  to  said  Bank,  or  upon 
any  failure  in  business  or  making  of  an  insolvent  assignment  by  the  under- 
signed, then  and  in  either  event  all  liabilities  of  the  undersigned  to  said 
Bank  shall  at  the  option  of  said  Bank  become  immediately  due  and  payable, 
notwithstanding  any  credit  or  time  allowed  to  the  undersigned  by  any  in-, 
strument  evidencing  any  of  the  said  liabilities. 

3.  Upon  the  failure  of  the  undersigned  either  to  pay  any  indebtedness 
to  said  Bank  when  becoming  or  made  due,  or  to  keep  up  the  margin  of 
collateral  securities  above  provided  for,  then  and  in  either  event  said  Bank 
may  immediately  without  advertisement,  and  without  notice  to  the  under- 
signed, sell  any  of  the  securities  held  by  it  as  against  any  or  all  of  the  lia- 
bilities of  the  undersigned,  at  private  sale  or  Broker's  Board  or  otherwise 
and  apply  the  proceeds  of  such  sale  as  far  as  needed  toward  the  payment  of 
any  or  all  of  such  liabilities  together  with  interest  and  expenses  of  sale, 
holding  the  undersigned  responsible  for  any  deficiency  remaining  unpaid 


138  SMITHS  FINANCIAL  DICTIONARY. 

after  such  application.  If  any  such  sale  be  at  Broker's  Board  or  at  public 
auction,  said  Bank  may  itself  be  a  purchaser  at  such  sale  free  from  any 
right  or  equity  of  redemption  of  the  undersigned,  such  right  and  equity 
being  hereby  expressly  waived  and  released.  Upon  default  as  afore- 
said, said  Bank  may  also  apply  toward  the  payment  of  the  said  liabili- 
ties all  balances  of  any  deposit  account  of  the  undersigned  with  said 
Bank  then  existing.  - 

It  is  further  agreed  that  these  presents  constitute  a  continuing  agree- 
ment, applying  to  any  and  all  future  as  well  as  to  existing  transactions 
between  the  undersigned  and  said  Bank. 


Dated,  New  York,  the day  of 19. . 

Also  see  Collateral  note. 

Contract.  A  formal  agreement  between  two  or  more  par- 
ties ;  also  the  writing  setting  forth  and  evidencing  an  agree- 
ment and  signed  by  the  parties  to  it  is  a  contract. 

It  is  an  accepted  rule  of  law  that  a  contract  should  be  inter- 
preted in  accordance  with  the  intention  of  the  parties  thereto ; 
and  the  usage  or  custom  of  any  particular  trade,  occupation, 
business  or  place  when  it  is  reasonable,  tmiform,  well  settled 
and  not  in  opposition  to  fixed  rules  of  law  or  in  contraven- 
tion of  the  express  terms  of  a  contract  is  deemed  to  form  a 
part  of  the  contract  and  to  enter  into  the  intention  of  the 
parties. 

Following  are  the  contracts  which  will  not  be  enforced  by 
the  courts  unless  there  is  written  evidence  of  them :  Con- 
tracts for  the  sale  of  lands  or  of  any  interest  in  lands :  leases 
for  a  longer  period  than  one  year ;  every  contract  that  is  not 
to  be  performed  within  one  year  from  the  making  thereof; 
every  special  promise  to  pay  the  debt  of  another  person ;  every 
agreement  made  upon  consideration  of  marriage  except  mu- 
tual promises  to  marry;  every  contract  for  the  sale  of  personal 
property  for  the  price  of  $50  or  more.  Other  contracts  than 
these  are  valid    though  not  in  writing. 

It  is  the  general  rule  of  law  that  a  written  contract  cannot 
be  orally  varied  or  contradicted  by  oral  evidence. 

Contracts  falling  due  on  a  holiday  are  settled  on  the  pre- 
ceding day.  When,  however,  two  holidays  occur  on  consecu- 
tive days  contracts  falling  due  on  the  first  of  those  days  are 
settled  on  the  preceding  day,  while  contracts  falling  due  on 
the  second  of  the  holidays  are  settled  on  the  succeeding  day. 


SMJTirS  lUXANClAL  DICTIONARY.  139 

Contract  grade.  The  grade  of  grain,  wheat  or  coffee  or 
anything  else  that  is  required  to  be  delivered  in  fulfilment  of 
a  contract. 

Contract  note.  In  merchandising  a  contract  note  is  issued 
when  one  party  has  bought  goods  of  or  sold  goods  to  another 
and  it  contains  a  description  of  the  goods,  the  price,  time  of 
delivery,  time  of  payment,  etc. 

On  the  London  Stock  Exchange  after  a  broker  has  bought 
or  sold  a  stock  he  sends  to  his  client  (customer)  a  contract 
note,  so-called,  showing  the  amount  (or  number  of  shares)  an^ 
the  price,  together  with  all  charges. 

Contribution.  When  two  or  more  parties  jointly  owe  a 
debt  and  one  is  compelled  to  pay  the  whole  of  it  the  others 
are  bound  to  indemnify  him  for  the  payment  of  their  shares ; 
an  indemnifying  payment  is  called  a  contribution. 

Contributory.  A  legal  term  used  in  Great  Britain  to  desig- 
nate the  holder  of  stock  or  of  shares  not  fully  paid  up,  so  that 
the  holder  is  liable  to  contribute  further  calls.  The  term  is 
generally  used  in  winding  up  (liquidation)  proceedings. 

Controlling  company.  One  which  controls  other  compa- 
nies by  ownership  of  a  majority  of  their  stocks. 

Convertible  bond.  A  bond  that  is  convertible  into  or  ex- 
changeable for  stock. 

Cooked  account  or  report.  An  account  or  a  report  that  has 
been  garbled  or  manipulated  for  the  purpose  of  deceiving. 
For  instance,  the  financial  report  of  a  corporation,  as  a  rail- 
road, that  has  been  made  up  so  as  to  show  a  better  condition 
than  really  exists  is  said  to  have  been  cooked. 

Copper.  A  general  designation  for  the  stock  of  a  copper 
mining  company. 

Copper  is  also  a  slang  expression  for  a  reversed  proceeding; 
for  instance,  if  a  speculator  receives  advice  to  buy  a  stock  and 
instead  sells  it  short,  he  is  said  to  have  coppered  the  advice. 

The  large  i-cent  United  States  coin  formerly  issued  was 
called  a  copper. 

Corn.  In  the  United  States  corn  means  Indian  corn  or 
maize ;  in  England  it  means  wheat  specifically  or  wheat,  bar- 
ley, rye  and  oats  collectively. 

Corn  belt.     The  states,  forming  a  belt,  which  are  the  largest 


140  SMITH'S  FINANCIAL  DICTIONARY. 

producers  of  corn,  viz :  Illinois,  Indiana,  Iowa,  Kansas,  Mis- 
souri, Nebraska,  Ohio. 

Corner.  A  corner  in  a  stock  is  created  by  the  purchase  of 
all  the  floating  or  purchasable  stock  of  a  company,  after  which 
the  price  of  it  can  be  advanced  at  will.  Speculators  who  are 
short  of  the  stock  and  are  unable  to  buy  or  borrow  to  make 
delivery  to  buyers  or  to  return  stock  which  they  have  bor- 
rowed are  in  speculative  parlance  squeezed.  They  must 
settle  with  buyers  as  best  they  can. 

Similar  operations  are  conducted  in  grain,  cotton,  coffee  and 
other  speculative  commodities. 

Corporation.  A  business  corporation  is  an  artificial  body, 
created  by  law,  composed  of  individuals  united  under  a  com- 
mon name,  with  power  of  succession,  so  that  changes  in  the 
individuals  composing  it  do  not  affect  the  body  itself;  in  law 
it  is  treated  as  a  person. 

The  common  name  for  corporation  is  company.  For  addi- 
tional information  see  Company. 

Corporation  seal.  The  common  seal  of  a  corporation  (joint- 
stock  company). 

Formerly  a  corporation  could  execute  contracts  only  by  its 
common  seal,  but  now  the  use  of  the  seal  is  not  necessary  in 
ordinary  business,  although  it  is  required  in  extraordinary 
matters. 

Corporation  stock.  In  Great  Britain  the  term  corporation 
stock  means  a  security  issued  by  an  incorporated  city,  town 
or  borough. 

Cost  and  freight.  When  goods  are  sold  "cost  and  freight" 
the  price  includes  the  cost  of  the  goods  and  the  freight  charges 
on  them,  but  does  not  include  insurance. 

Cost,  insurance  and  freight.  The  letters  "c.  i.  f."  in  a  con- 
tract of  sale  of  merchandise  stand  for  the  words  "cost,  insur- 
ance, freight"  and  they  mean  that  the  price  agreed  upon  is  all 
that  the  buyer  is  to  be  required  to  pay  for  the  goods  them- 
selves, for  their  transportation  to  destination  and  for  their 
insurance  while  in  transit. 

The  seller  furnishes  the  goods,  pays  the  insurance  on  them, 
pays  the  freight  on  them,  delivers  the  merchandise  to  the  car- 
rier and  forwards  the  bill  of  lading  to  the  bu^er.  His  duty  is 
tlien  discharged. 


SMITH'S  FINANCIAL  DICTIONARY.  141 

The  carrier  is  an  agent  of  the  buyer  and  delivery  to  the 
carrier  is  equivalent  to  delivery  to  the  buyer.  The  seller  is 
entitled  to  the  amount  named  in  his  contract  whether  the 
goods  reach  the  buyer  or  not.  For  loss  or  damage  while  in 
transit  the  buyer  must  look  exclusively  to  the  carrier  or  the 
insurer. 

Cotton  belt.  The  states,  forming  a  belt,  which  are  pro- 
ducers of  cotton,  viz :  Alabama,  Arkansas,  Florida,  Georgia, 
Indian  Territory,  Kansas,  Kentucky,  Louisiana,  Mississippi, 
Missouri,  North  Carolina,  Oklahoma,  South  Carolina,  Ten- 
nessee, Texas,  Virginia. 

Cotton  bill.  A  draft  (bill  of  exchange)  drawn  against  the 
consignee  of  a  shipment  of  cotton.  The  bill  of  lading  is  at- 
tached to  (accompanies)  the  draft  and  is  surrendered  on  pay- 
ment of  the  draft   or  on  the  acceptance  of  the  draft. 

Cotton  contract.  The  contract  recognized  by  the  New 
York  Cotton  Exchange  is  for  50,000  pounds  of  cotton,  in  about 
100  bales,  growth  of  the  United  States,  to  be  delivered  from  a 
licensed  warehouse  at  the  port  of  New  York  in  the  month 
agreed.  The  delivery  is  at  seller's  option  upon  3  days'  notice 
to  the  buyer   and  from  one  warehouse. 

Cotton  crop  year.  Begins  September  i,  when  the  new  crop 
is  ready  to  be  picked. 

Coulisse.  The  outside  ("curb")  market  for  securities  in 
Paris,  which  is  conducted  under  the  portico  or  peristyle  of  the 
bourse. 

In  the  coulisse  dealings  are  conducted  in  securities  not  dealt 
in  on  the  bourse,  except  that  there  are  dealings  in  rentes  in 
the  coulisse  as  well  as  on  the  bourse.  A  trader  or  a  broker  in 
the  coulisse  is  called  a  coulissier.  There  is  no  fixed  commission 
in  the  coulisse,  but  the  usual  commission  is  about  t-t6  per 
cent. 

Coulissier.  A  trader  or  a  broker  in  the  coulisse  or  outside 
("curb")  market  for  securities  in  Paris. 

Counterfeit.  Counterfeit  money  is  bogus  money;  that  is, 
money  manufactured  without  authority  of  law  in  imitation  of 
genuine  money   and  issued  with  intent  to  deceive  and  defraud. 

Counterfoil  or  stub.  A  portion  of  a  document  permanently 
retained  in  a  book  as  a  memorandum  after  the  other  portion 


142  SMITH'S  FINANCIAL  DICTIONARY. 

has  been  detached  by  means  of  a  line  of  perforations  or  other- 
wise, as  the  counterfoil  or  stub  of  a  check    or  receipt. 

Counter  rate.  In  a  transaction  in  (foreign)  exchange  the 
counter  or  over-the-counter  rate  is  the  rate  which  the  dealer 
in  exchange  pays  for  a  bill. 

Countersigned.     Authenticated  by  an  additional  signature. 

Country  bank.  In  classifying  the  national  banks  the  Comp- 
troller of  the  Currency  designates  as  a  country  bank  one  which 
is  not  situated  in  a  reserve  city  or  a  central  reserve  city. 

Country  check.  Designation  for  a  check  on  a  bank  remote 
from  a  clearing  house. 

Country  note.  In  Great  Britain  this  term  means  a  circula- 
ting note  issued  by  a  bank  other  than  the  Bank  of  England. 
The  Bank  of  England  has  the  sole  right  to  issue  notes  in  a 
certain  radius  of  which  London  is  the  centre.  A  note  issued 
by  it  is  designated  simply  as  a  bank  note. 

Coupon.  The  obligation  for  interest  on  a  bond  that  is 
called  a  coupon  is  a  printed  part  of  the  bond  attached  in  ticket 
form  so  that  it  may  be  cut  off  when  it  becomes  due.  A  coupon 
may  be  sold  or  may  be  deposited  in  a  bank  the  same  as  a  check. 

Coupon  bond.  A  bond  payable  to  bearer  without  registra- 
tion of  the  owner's  name.  The  holder  may  clip  the  coupons 
and  collect  the  interest  called  for. 

Coupon  bonds  are  preferred  for  speculative  dealings  and 
for  temporary  investment.  They  generally  sell  fractionally 
higher  than  registered  bonds  for  the  reason  that  they  are  more 
marketable  and  because  a  change  in  ownership  requires  no 
formal  transfer  but  merely  the  delivery  and  receipt  of  the 
certificate. 

Sometimes  registered  coupon  bonds  are  issued.  These 
are  bonds  the  principal  of  which  is  payable  only  to  those 
whose  names  are  inscribed  on  them  as  owners  and  whose 
names  also  are  registered  (entered  on  the  books  of  the  com- 
pany issuing  them),  but  the  coupons  calling  for  the  payment 
of  the  interest  as  it  becomes  due  are  payable  to  bearer. 

Sometimes,  also,  coupon  bonds  are  issued  which  are  con- 
vertible into  (exchangeable  for)  registered  bonds  both  prin- 
cipal and  interest  on  which  are  payable  to  the  registered 
owner.     Payment  of  interest  on  registered  bonds   (not  regis- 


SMITH'S  FINANCIAL  DlCTIUNARY.  143 

tered  coupon  bonds)  is  by  check  sent  to  the  addresses  of  the 
registered  owners. 

Coupon  bonds  issued  by  the  United  States  government  are 
■convertible  into  registered  bonds,  but  there  is  no  provision  of 
law  for  the  conversion  of  registered  bonds  into  coupon  bonds. 

When  a  coupon  has  been  detached  from  a  bond  before  pay- 
ment of  it  is  due  the  tendering  of  the  amount  of  the  coupon  in 
cash  supplies  the  deficiency  and  makes  the  bond  a  delivery. 

The  English  name  for  a  coupon  bond  is  bond  to  bearer. 

Coupon  currency.  A  plan  was  presented  to  the  Fifty-sev- 
enth Congress  (1901-2)  for  paper  currency  of  the  denomina- 
tions of  5  and  10  cents.  The  name  coupon  currency  was  de- 
rived from  the  proposition  to  print  the  currency  of  either  de- 
nomination in  blocks  or  sheets  of  five  pieces  or  coupons  which 
could  be  detached  as  needed.  The  coupon  currency  was  to  be 
purchasable  in  any  lawful  money  of  the  United  States. 

The  idea  was  to  enable  small  sums  to  be  sent  by  mail,  al- 
though the  coupon  currency  was  to  be  legal  tender  for  amounts 
not  exceeding  $10.  The  plan  did  not  commend  itself  for  the 
reason  that  it  involved  a  return  to  the  use  of  "shinplasters." 

Coupon  off.  When  a  bond  is  sold  coupon  oiT  the  coupon 
for  the  current  interest  payment  has  been  detached  from  the 
l3ond. 

Coupon  on.  When  a  bond  is  sold  coupon  on  the  coupon  for 
the  current  interest  payment  remains  attached  to  the  bond. 

Also  see  Coupons  attached. 

Coupons  attached.  A  bond  to  which  remain  attached  suc- 
cessive coupons  past  due.  In  such  a  case  the  value  of  the 
coupons  depends  on  the  prospect  for  their  payment. 

Course  of  exchange.  This  is  the  English  name  for  a  report 
or  record  of  rates  of  foreign  exchange. 

In  London  there  is  a  market  for  (there  are  dealings  in)  bills 
of  foreign  exchange  (commonly  called  foreign  bills)  on  Tues- 
day and  again  on  Thursday  in  each  week  at  the  Royal  Ex- 
change. The  market  begins  about  2  p.  m.  and  continues  until 
about  3  p.  m.  At  the  conclusion  of  the  market  each  foreign 
banker  (dealer  in  foreign  exchange)  prepares  and  issues  a  list 
of  prices,  designated  as  the  course  of  exchange,  which  gives 
the  prices  at  which  transactions  were  negotiated. 


144  SMITH'S  FINANCIAL  DICTIONARY. 

Course  of  trade.  Trade  as  it  is  expanding  or  contracting 
in  volume. 

Court  of  directors.  The  assembled  board  of  directors  of  the 
Bank  of  England  is  called  the  court  of  directors.  . 

Court  of  exchequer.  An  English  court  for  the  trial  of  mat- 
ters relating  to  the  crown  revenues. 

Cover.  A  term  used  on  the  London  Stock  Exchange,  which 
means  the  security  deposited  by  a  borrower  with  the  lender 
or  by  a  speculator  with  a  broker  to  protect  the  lender  or 
broker  against  loss.  Besides  the  cover  speculators  often  have 
to  deposit  money  to  protect  the  lender  or  broker  in  case  the 
value  of  the  security  deposited  as  cover  falls  rapidly.  This 
money  is  called  margin. 

Margin  is  not  required  to  any  great  extent  in  London,  where 
credit  enters  more  largely  into  business  in  stocks,  and  in  fact 
in  other  things,  than  in  New  York.  When  the  credit  of  the 
client  (customer)  in  London  is  established  his  broker  does 
not  ordinarily  call  on  him  for  any  cash  until  the  next  settle- 
ment (see  Settlement,  The). 

Covering.  In  foreign  exchange  dealings  covering  ordi- 
narily consists  in  paying  one  bill  of  exchange  (draft)  ^vith 
another.  For  example,  a  foreign  exchange  dealer  in  New 
York  draws  and  sells  a  bill  on  London  due  in  60  days.  When 
the  bill  matures  (falls  due)  he  takes  it  up  (pays  it)  with  a  de- 
mand bill  (bill  payable  immediately)  which  he  has  purchased. 
Again :  A  dealer  in  New  York  draws  and  sells  a  bill  on  Lon- 
don and  buys  a  bill  on  Paris  for  an  equivalent  amount  which 
he  forwards  to  London  in  cover  or  discharge  (in  payment)  of 
the  bill  which  he  sold  on  London. 

Covering  also  is  a  speculative  term,  meaning  the  act  of  buy- 
ing stocks  or  commodities  for  the. purpose  of  closing  short 
contracts — in  other  words,  buying  back  stocks  or  commodities 
previously  sold,  but  which  were  not  possessed  when  sold. 

On  the  London  Stock  Exchange  the  expression  is  also  used 
in  this  sense  sometimes ;  but  more  frequently  it  describes  the 
operation  by  which  a  jobber,  having  bought  from  or  sold  to  a 
broker,  "undoes"  the  bargain  by  a  fresh  purchase  or  sale  with 
another  jobber   or  broker. 

Cowry  money  or  cowry-shell  money.  The  money-cowry 
or  the  (powry-shell  that  is  used  as  money   is  a  beautiful  hemi- 


SMITH'S  FINANCIAL  DICTIONARY.  145 

spherical  shell  scarcely  an  inch  long,  light  straw  color  and 
white.  Cowry  shells  abound  on  the  Malabar  coast  and  near 
the  Maldive  Islands.  They  are  shipped  to  England  for  trade 
with  Africa  where  they  are  put  up  in  strings  of  100  shells  and 
50  strings  pass  for  the  equivalent  of  $i.  These  shells,  are  also 
used  as  currency  in  Siam  where  no  of  them  are  equivalent  to 
I  cent. 

Craze.  The  term  as  applied  to  stocks  means  an  extrava- 
gant desire  to  buy. 

Credit.  Confidence  established  by  an  individual,  firm,  corpo- 
ration or  government  in  his  or  its  ability  and  disposition  to 
fulfil  financial  obligations.  Opposing  terms  are  "in  good 
credit"  and  "in  bad  credit." 

Property  obtained  on  credit  is  property  received  and  to  be 
paid  for  at  a  future  time. 

A  credit  entry  in  an  account  is  a  favorable  entry ;  it  is  the 
reverse  of  a  debit  entry. 

Credit  bill.  A  bill  of  exchange  (or  draft)  drawn  against 
credit  granted  by  the  drawee  (the  one  who  is  to  pay  the  bill) 
to  the  drawer. 

Credit  currency.  Currency  issued  by  a  bank  for  use  in 
transactions  where  ordinary  bank  credit  available  through  the 
medium  of  checks  is  not  practicable. 

For  example,  a  merchant  or  a  manufacturer  in  New  York 
needing  extra  funds  borrows  from  his  bank,  but  he  does  not 
borrow  actual  money ;  he  in  reality  borrows  credit  against 
which  he  draws  his  checks. 

When  a  farmer  needs  extra  money  to  harvest  his  crops  or 
move  them  to  market  it  is  not  practicable  for  him,  as  a  rule, 
to  borrow  credit  and  draw  checks  against  it.  He  must  have 
the  actual  money.  Advocates  of  credit  currency  hold  that 
the  banks  should  be  authorized  to  issue  currency  for  such  pur- 
poses secured  by  their  general  assets  in  the  same  manner  that 
the  credits  which  they  loan  to  be  checked  against  are  secured. 
Such  a  currency,  they  urge,  would  be  perfectly  safe  and  would 
be  elastic,  supplying  temporary  and  local  needs  and  obviating 
the  danger  of  currency  famines. 

For  additional  information  see  Asset  currency ;  also  see 
Emergency  currency. 


146  SMITH'S  FINANCIAL  DICTIONARY. 

Credit  Foncier.  An  institution  in  France  which  makes  loans 
on  real  estate ;  it  is  an  agricultural  banking  institution. 

Credit  Mobilier.  An  institution  incorporated  in  France  in 
1852  for  general  financial  operations.  The  same  name  was 
borne  by  a  concern  chartered  in  Pennsylvania  wdiich  in  1863 
undertook  the  construction  of  the  Union  Pacific  Railroad  and 
collapsed  amid  scandal. 

Credit  note.  A  commercial  term  ;  a  memorandum  or  ac- 
count of  goods  sent  back  to  the  consignor  by  the  consignee 
to  be  credited  to  the  consignee.  The  term  also  applies  to 
a  memorandum  transmitted  by  the  consignee  to  the  consignor 
in  which  the  consignor  claims  an  allowance,  as  for  a  shortage 
in  the  consignment    or  for  a  deficiency  in  quality,  etc. 

Creditor.     One  to  whom  another  is  indebted. 

Credit  slip.  Same  as  paying-in  slip ;  English  name  for  the 
printed  form  upon  which  a  depositor  in  a  bank  enters  the 
amounts  of  checks,  money,  etc.,  to  be  placed  to  his  credit  in 
the  bank. 

Cremation  certificate.  A  certificate  that  securities  have 
been  cremated- — destroyed  by  burning.  Such  a  certificate  is 
furnished  to  the  New  York  Stock  Exchange  when  former  secu- 
rities have  been  supplanted  by  new  ones. 

Crime  of  1873.  A  phrase  applied  to  the  coinage  act  of  Feb- 
ruary 12,  1873,  which  discontinued  the  coinage  of  the  silver 
dollar  by  omitting  it  from  the  list  of  coins  authorized  to  be 
minted  (manufactured)  by  the  government. 

Advocates  of  the  free  coinage  of  silver  later  declared  that 
the  act  was  passed  surreptitiously.  The  bill  was  before  Con- 
gress two  vears  and  ten  months  before  it  was  adopted.  It 
was  ])rinted  thirteen  times  by  order  of  Congress.  The  de- 
bates on  it  occupied  sixty-six  columns  in  the  Senate  proceed- 
ings and  seventy-eight  columns  in  the  House  proceedings. 
The  reason  the  discontinuance  of  the  silver  dollar  attracted  so 
little  public  notice  at  the  time  was  that  the  metal  in  it  was 
then  worth  two  cents  more  than  the  metal  in  a  gold  dollar  ;  in 
other  words,  a  silver  dollar  was  worth  $1.02  in  gold  money. 
Consequently  llic  silver  dollar  did  not  circulate  and  was  prac- 
tically unknown. 

Coinage  of  the  silver  dollar  was  resinned  under  the  Rland- 
Allison  act  of  February  28,  1878. 


SMlTirs  FINANCIAL  DICTIONARY.  147 

Crop  report.  See  Government  crop  report ;  also  see 
Weather-crop  report. 

Cross.  When  a  cross  is  used  as  a  signature  by  a  person 
who  cannot  write  the  operation  is  generally  described  as  sign- 
ing by  mark.  For  additional  information  see  Signing  by 
mark. 

Crossed  check.  The  crossed  check  is  not  in  use  in  the  Uni- 
ted States,  but  it  is  in  general  use  in  Great  Britain,  where  it  is 
recognized  and  in  fact  authorized  by  law. 

When  a  check  bears  across  its  face  an  addition  of  the  words 
"and  company"  or  an\'  abbreviation  thereof  between  two 
parallel  lines  (two  lines  up  and  down)  or  of  two  parallel 
transverse  lines  simply,  either  with  or  without  the  words  "not 
negotiable,"  that  addition  constitutes  a  crossing  and  the  check 
is  crossed  generally    as  distinguished  from  crossed  specially. 

When  a  check  bears  across  its  face  an  addition  of  the  name 
of  a  banker,  either  with  or  without  the  words  "not  negotiable," 
that  addition  constitutes  a  crossing  and  the  check  is  crossed 
specially   and  is  crossed  to  that  banker. 

When  a  check  is  uncrossed  a  lawful  holder  may  cross  it 
generally  or  specially.  When  a  check  is  crossed  generally 
the  banker  on  whom  it  is  drawn  must  not  pay  it  otherwise  than 
to  a  banker ;  when  a  check  is  crossed  specially  the  banker  on 
whom  it  is  drawn  must  not  pay  it  otherwise  than  to  the  banker 
to  whom  it  is  crossed. 

A  banker  who  pays  a  check  crossed  generally  otherwise 
than  to  a  banker  or  a  check  crossed  specially  otherwise  than 
to  the  banker  to  whom  it  is  crossed    is  liable  to  the  true  owner. 

Crossed  checks  are  generally  used  in  London  Stock  Ex- 
change transactions.  The  object  in  crossing  checks,  of  course, 
is  to  prevent  their  payment  to  wrongful  holders. 

Cross  exchange.  An  operation  in  exchange  in  which  three 
or  more  places  are  involved.  For  example,  a  person  in  New 
York  who  has  an  obligation  to  meet  in  London  may  find 
it  more  achantageous  to  forward  to  London  in  payment  of  it 
a  draft  (bill  of  exchange)  on  Paris  than  to  forw^ard  a  draft  on 
London.  In  such  a  case  exchange  on  Paris  in  New  York- 
would  be  cheaper  than  exchange  on  London  in  New  York. 

Also  see  Arbitration  of  exchange. 

Cross  order.     Same  as  matched  order;  a  stock  market  term. 


148  SMITH'S  FINANCIAL  DICTIONARY. 

meaning  an  order  to  buy  and  sell  the  same  stock,  usually  for 
the  purpose  of  making  a  quotation. 

Sometimes  a  broker  receives  an  order  from  one  customer  to 
buy  and  from  another  an  order  to  sell  the  same  stock ;  then  he 
has  a  cross  order  which  is  not  fictitious.  On  the  New  York 
Stock  Exchange  a  broker  who  has  an  order  to  buy  and  another 
order  to  sell  the  same  stock  is  not  allowed  to  fulfil  the  orders 
by  entering  one  against  the  other.  He  must  make  an  actual 
purchase  of  another  broker  and  an  actual  sale  to  another 
broker. 

Cross  trade.  A  stock  market  designation  for  a  simultaneous 
piU'chase  and  sale  of  the  same  stock. 

The  term  cross  trade  also  is  a  synonym  for  a  wash  trade  -or 
transaction  when  a  stock  is  simultaneously  bought  and  sold 
in  order  to  make  a  quotation.  Cross  trading  or  washing 
when  extensive  in  a  stock  is  generally  for  the  purpose  of  in- 
ducing speculation  in  the  stock  by  imparting  apparent  activity 
to  it.     The  dealings  are  fictitious  and  so  are  the  prices. 

Bucketing  operations  may  be  carried  on  by  means  of  cross 
trades ;  see  Bucketing. 

CT.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  certificates. 

Cum  call.  With  call ;  on  the  London  Stock  Exchange  when 
a  stock  or  share  is  sold  cum  call  it  means  that  a  call  has  been 
made  and  that  the  buyer  will  have  to  pay  it;  see  Call. 

Cum  dividend.  With  dividend;  on  the  London  Stock  Ex- 
change when  a  stock  is  sold  cum  dividend  it  means  that  a  divi- 
dend has  been  declared  or  is  due  on  the  stock  and  that  the 
dividend  goes  to  the  buyer  of  the  stock.  On  the  New  York 
Stock  Exchange  the  corresponding  term  is  dividend  on. 

Cum  drawing.  English  term ;  a  bond  sold  cum  drawing  in- 
cludes any  advantage  to  the  buyer  if  the  bond  is  drawn  for  re- 
demption. 

Cumulative  consols.  On  receiving  instructions  the  Bank  of 
England  will  invest  the  interest  on  consols  every  quarter,  add- 
ing it  to  the  capital  sum.  The  system  is  also  applied  to  other 
British  government  issues  and  to  some  corporation  stocks. 

Cumulative  dividend.  A  dividend  which  if  not  paid  regu- 
larly or  in  full  accumulates  and  must  be  paid  in  the  future. 

Cumulative  stock.     Usually  preferred  stock   the  dividend  on 


SMITH'S  FINANCIAL  DICTIONARY.  149 


which  if  not  paid  regularly  or  in  full  accumulates  and  must 
be  paid  in  the  future  before  a  dividend  can  be  paid  on  the 
common  stock. 

Curb  market.     See  Outside  market. 

Curbstone  or  curb  broker.  A  name  formerly  applied  to  a 
broker  who  bought  and  sold  puts,  calls  and  other  privileges. 
Now  it  means  a  broker  who  deals  in  the  outside  or  curb 
market. 

Currency.  That  which  is  in  general  use  and  circulation  as 
money ;  see  Money. 

Currency,  however,  is  commonly  construed  as  paper  money, 
whether  United  States  notes  (greenbacks),  gold  certificates, 
silver  certificates,  Treasury  notes  (silver-purchase  notes)  or 
bank  notes. 

Coins  of  a  denomination  less  than  $1  are  designated  as  frac- 
tional currency. 

Currency  act,  approved  March  14,  1900.  Official  title  of  the 
gold  standard  act;  see  Gold  standard  act. 

Currency  bond.  A  bond  the  principal  and  interest  on  which 
may  be  paid  in  any  kind  of  lawful  money. 

Currency  certificate.  Sometimes  called  legal  tender  certifi- 
cate ;  a  certificate  (or  receipt)  for  United  States  notes  (green- 
backs) deposited  in  the  Treasur);  or  in  any  Sub-Treasury  of 
the  United  States;  of  the  denomination  of  $10,000  (at  one  time 
also  $5,000)  ;  authorized  by  the  act  of  June  8,  1872 ;  authoriza- 
tion repealed  and  issuance  discontinued  by  the  act  of  March 
14,  1900. 

The  certificate  bore  no  interest  and  was  not  a  legal  tender. 
The  notes  represented  by  the  certificates  were  merely  a  special 
deposit  and  the  certificate,  which  was  transferable,  was  re- 
deemable at  the  place  where  issued. 

Currency  certificates  were  chiefly  used  in  the  settlement  of 
clearing  house  balances  and  for  holding  in  the  reserves  of 
banks. 

Currency  of  a  bill.  The  period  between  the  date  on  which 
a  bill  of  exchange  (draft)  is  drawn  (or  is  accepted)  and  that 
on  which  it  is  due. 

Current  account  or  account  current.  Same  as  open  or  run- 
ning   or  continuing  account ;  an  account  that  continues  and  in 


150  SMITH'S  FINANCIAL  DICTIONARY. 

which  a  settlement  is  made  at  intervals,  as  every  30  days,  60 
days   or  twelve  months. 

in  (ireat  Britain  a  current  account  (also  called  drawing  ac- 
count) in  a  bank  is  one  which  may  be  added  to  by  deposits  and 
drawn  against  at  will — at  any  time.  On  the  other  hand,  a 
deposit  account  is  one  in  which  money  deposited  remains  by 
agreement  for  a  specified  time  and  draws  interest  at  a  speci- 
fied rate. 

Current  assets,  'i'he  current  assets  of  a  stock  company  in- 
clude all  shifting  and  changeable  assets  except  material  and 
supplies. 

In  the  case  of  a  railroad  current  assets  include  (i)  cash  on 
hand  and  deposit;  (2)  loans  and  bills  receivable;  (3)  accounts 
receivable;  (4)  due  from  other  companies  and  individuals;  (5) 
due  from  the  company's  agents  and  officers ;  (6)  advances  to 
other  companies;  (7)  sundry  assets. 

Current  liabilities.  The  current  liabilities  of  a  stock  com- 
pany include  (i)  loans  and  bills  payable  ;  (2)  accounts  payable; 
(3)  pay-rolls  and  vouchers ;  (4)  interest  and  dividends  ac- 
crued;  (5)  due  to  other  companies  (in  the  case  of  a  railroad, 
traffic  balances)  :  (6)  sundry  liabilities. 

Custom.  Usage  which  has  acquired  the  force  of  law  by 
reason  of  its  being  continued,  peaceable,  reasonable  and  con- 
sistent. 

Customer.  In  banking  a  customer  is  one  who  has  dealings 
with  a  bank,  particularly  one  who  borrows  money  from  it ;  in 
stock  dealings  a  customer  is  a  broker's  principal — the  one  who 
employs  the  broker.     The  English  name  for  customer  is  client. 

Custom  house.  The  place  established  by  the  government 
where  importers  of  merchandise  make  entry  of  it  and  pay  the 
duty  charged  on  it ;  also  the  place  where  vessels  to  and  from 
foreign  ports  are  entered  and  cleared. 

Customs  or  customs  duty.  The  tariff  or  tax  levied  or  as- 
sessed upon  articles  imported  from  another  country  (in  some 
countries  it  is  also  levied  upon  articles  exported). 

Cut  money.  In  some  countries,  owing  to  the  scarcity  of 
small  coins,  large  coins  formerly  were  cut  into  several  equal 
parts  and  circulated  as  fractional  currency  which  was  called 
cut  money. 

Cutthroat  mortgage.     A   mortgage  intended  to  cut  off  the 


S.yjTJrS  l-JX.L\'CIAL  DICTIONARY.  131 

mortgagor's  riglit  of  summons  or  notice  and  recourse;  but  this 
is  an  expedient  not  sustained  in  equity  proceedings. 

Cutting  a  melon.  When  a  company  makes  a  large  extra 
distribution  to  its  shareholders  in  money  or  stock  the  act  is 
colloquially  described  as  cutting  a  melon. 

CV.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  convertible,  as  convertible  bonds. 

CY.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  currency. 

Cypher  code.     Same  as  code ;  see  Code. 


D 


D.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  debenture  or  division,  as  debenture  or  divisional  bonds. 

D.  A.  Abbreviation  for  documentary  bill  for  acceptance; 
used  in  foreign  exchange  dealings.  See  Documentary  bill  for 
acceptance. 

Dabbling.  In  speculation  dabbling  is  venturing  incident- 
all}^  and  lightly. 

Damages.  In  law  money  recoverable  as  amends  for  a 
wrong  or  harm  inflicted;  injury  such  as  can  be  estimated  in 
money. 

Damages  on  protested  bills.  The  penalty  allowed  by  law 
to  the  holder  of  a  bill  (promissory  note  or  acceptance)  which 
has  gone  to  protest.  In  most  states  these  damages  are  in 
addition  to  the  protest  fee  and  also  in  addition  to  interest  after 
maturity. 

Dating.  This  is  a  term  applied  to  a  method  of  extending 
credit  beyond  the  period  for  which  it  ostensibly  is  granted. 

For  exam])le,  if  a  buyer  of  goods  is  to  receive  credit  for  30 
days  and  is  allowed  a  30-day  dating  the  period  of  credit  (30 
days)  does  not  l)€gin  and  the  bill  for  the  goods  is  not  dated 
imtil  30  days  after  the  ])urchase  (or  after  the  shipment  of  the 
goods  if  shipment  is  not  made  at  the  time  of  the  purchase). 
Thus,  a  credit  of  60  davs  is  actuallv  granted. 


152  SMITH'S  FINANCIAL  DICTIONARY. 

Days  of  grace.  The  days,  usually  three,  allowed  in  some 
states  for  payment  of  a  note  or  bill  of  exchange  after  it  be- 
comes due  as  expressed  in  the  obligation  itself.  For  addi- 
tional information  see  Grace. 

Day-to-day  accommodation.  English  term  for  a  loan  re- 
newable from  day  to  day. 

Day-to-day  loan.  English  term  for  a  loan  renewable  from 
day  to  day. 

Day-to-day  money.  English  term  for  a  loan  of  money  re- 
newable from  day  to  day.  Known  as  call  money  in  the  United 
States,  that  is,  money  returnable  on  the  demand  or  call  of  the 
lender. 

Day-to-day  option.  London  Stock  Exchange  name  for  an 
option  which  continues  for  only  one  day.  The  corresponding 
term  on  the  New  York  Stock  Exchange  is  over-night. 

DE.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  deferred. 

Dead  assets.  Assets  that  are  unproductive  and  perhaps  of 
little  or  no  value. 

Dead  beat.  A  colloquial  name  for  a  person  who  is  notorious 
for  not  paying  his  debts. 

Dead  duck.  New  York  Stock  Exchange  term  for  a  specu- 
lator who  is  hopelessly  insolvent. 

Dead  freight.  A  sum  paid  by  a  shipper  for  freight  room 
engaged  and  paid  for,  but  not  occupied. 

Deadhead.  Name  applied  to  a  person  who  is  accorded  a 
free  privilege,  as  a  pass  for  riding  free  on  a  railroad  or  a  frank 
for  sending  telegraph  despatches  free  :  or  who,  in  fact,  obtains 
any  privilege  for  nothing. 

Dead  weight.  The  name  given  to  that  portion  of  the  British 
national  debt  which  is  not  represented  by  investments  or  re- 
productive expenditure ;  it  includes  the  permanent  debt  of  the 
government  c^  Great  Britain  to  the  Bank  of  England,  amount- 
ing to  £11,015,100,  which  serves  as  backing  for  (as  security 
for)  a  corresponding  amount  of  notes  (paper  money)  issued 
by  the  bank.  This  item  appears  as  a  credit  item  in  the  weekly 
return  of  the  bank  under  the  heading  "Issue  department." 

Deal.  A  secret  bargain  or  understanding  among  persons 
for  the  benefit  of  those  engaged  in  it. 


SMITH'^  FINANCIAL  DICTIONARY.  153 

A  (leal  in  stocks  is  a  scheme  to  advance  or  depress  prices ;  it 
is  usually  conducted  with  secrecy. 

Dealer.  In  banking  nomenclature  a  dealer  is  a  depositor  in 
a  bank  who  borrows  (obtains  a  loan)  from  the  bank  whenever 
his  need  for  money  exceeds  the  amount  which  he  has  on  de- 
posit in  the  bank. 

On  the  London  Stock  Exchange  dealer  is  another  name  for 
jobber,  but  jobber  is  the  name  more  commonly  used ;  see  Job- 
ber. 

Dear  money.  Money  is  dear  when  it  cannot  be  obtained 
except  at  high  rates  of  interest.  At  such  a  time  securities  are 
likely  to  be  depressed,  not  because  they  are  worth  less,  but 
because  money  is  worth  more — the  purchasing  power  of  money 
having  increased. 

Debenture.     A  certificate  of  debt  issued  by  a  corporation. 

Unless  secured  by  a  mortgage  it  is  simply  a  promise  to  pay, 
or  in  other  words,  a  promissory  note.  It  differs  from  an  in- 
come bond  only  in  that  it  contains  a  promise  to  pay  a  certain 
amount  of  interest  at  stated  periods. 

In  Great  Britain  a  debenture  bond  or  stock  is  generally 
thought  to  be  secured- by  mortgage  on  real  property;  but  this 
is  not  necessarily  the  case.  The  word  merely  means  a  debt 
or  promise  to  pay.  By  universal  custom,  however,  the  deben- 
ture bonds  or  stocks  of  British  companies  rank  before  the  pre- 
ference and  ordinary  capital ;  and  as  a  rule  they  are  secured 
by  a  charge  on  the  companies'  real  property. 

In  Great  Britain  the  chief  difference  between  a  debenture 
bond  and  a  debenture  stock  is  that  a  bond  is  for  a  fixed  amount, 
while  a  stock  is  divisible  and  may  be  transferred  in  multiples 
of  £1  or  sometimes  even  in  smaller  amounts.  Another  im- 
portant dift'erence  lies  in  the  fact  that  a  bond  is  generally  a 
negotiable  instrument,  transferable  by  delivery,  and  is  the 
property  of  the  bearer,  with  interest  coupons  attached,  while 
stock  is  registered  in  the  name  of  the  holder  and  is  transferred 
by  deed,  the  interest  being  forwarded  to  holders  by  the  com- 
pany. 

Debit.  A  debt  recorded  in  an  account.  A  debit  entry  in 
an  account  is  an  unfavorable  entry ;  it  is  the  reverse  of  a  credit 
entry. 


154  SMITH'S  FINANCIAL  DICTIONARY. 

Debit  note.  A  commercial  term  ;  a  memorandum  or  account 
of  goods  sent  back  to  the  consignor  by  the  consignee  and 
debited  by  the  consignee  to  the  consignor. 

Debt.  A  pecuniary  obHgation ;  that  whicli  one  owes  to 
another. 

Debt-book.     A  ledger. 

Debt  certificate.  The  commonest  form  of  debt  certificate 
is  an  interest-bearing  bond  as  issued  by  a  corporation,  munici- 
pality or  government. 

Debt  of  honor.  A  debt  that  depends  for  payment  solely  on 
the  honor  of  the  debtor. 

Debt  of  record.     A  debt  evidenced  by  a  judgment. 

Debtor.  One  from  whom  something,  as  money,  is  due  to 
another. 

Declaration  of  trust.  An  acknowledgment  that  property  to 
which  one  person  holds  the  title  belongs  to  another  for  whose 
benefit  the  title  is  held. 

Deed.  A  written  instrument  of  conveyance  under  seal,  as  a 
deed  for  land. 

Deed  of  gift.  A  conveyance  of  property  in  consideration  of 
love  and  affection  or  good  will. 

Deed  of  trust.  A  conveyance  of  property  to  a  party  who  is 
to  hold  it  in  trust  for  another. 

Deep  level.  London  Stock  Exchange  name  for  the  stock 
of  a  South  African  mining  company  whose  workings  or  levels 
are  deep  dowai  in  the  earth  ;  an  "outcrop"  mine  is  worked  near 
the  surface. 

Defaced  coin.  One  stamped  with  unauthorized  words,  let- 
ters or  marks. 

Defaced  securities.     See  Destroyed  or  defaced  securities. 

Defalcation.  Embezzlement  or  fraudulent  appropriation  of 
money  or  property  held  in  trust ;  a  deficiency  caused  by  a 
breach  of  trust. 

Default.  Failure  to  perform  or  fulfil  an  obligation,  as  fail- 
ure to  make  payment  on  a  promissory  note  or  acceptance  at 
maturity  (when  due). 

Failure  to  pay  interest  on  bonds  when  due  constitutes  a 
default  and  furnishes  ground  for  application  for  a  receiver- 
ship. 


SMITH'S  FINANCIAL  DICTIONARY.  155 


Defaulter,  One  who  misappropriates  or  fails  to  account  for 
money  or  property  with  which  he  is  entrusted. 

On  the  London  Stock  Exchange  one  who  has  failed  to  meet 
his  bargains  (contracts)  is  a  defaulter  and  ceases  to  be  a  mem- 
ber.    For  additional  information   see  Hammered. 

Deferred  Dond.  In  the  United  States  a  deferred  bond  is  a 
bond  upon  which  the  payment  of  interest  is  deferred  for  a 
certain  period. 

In  Great  Britain  a  deferred  bond  is  a  bond  the  interest  on 
which  increases  on  a  scale  until  it  reaches  the  maximum  rate. 

Deferred  ordinary  stock.  English ;  also  called  A  stock ;  re- 
ceives a  varying  dividend  from  the  balance  remaining  after 
payment  on  the  preferred  ordinary  stock.  For  additional  in- 
formation see  Deferred  stock. 

Deferred  stock.  Stock  which  is  to  realize  no  dividend  until 
some  future  contingent  event,  as  when  the  net  earnings  shall 
have  amounted  to  more  than  enough  to  pay  a  dividend  on  the 
common  stock.  Deferred  stock  is  rarely  issued  in  the  United 
States. 

In  Great  Britain  when  an  ordinary  (common)  stock  has 
been  divided  into  two  parts,  one  part,  called  deferred,  receives 
no  dividend  until  the  other  part,  called  preferred,  has  received 
a  dividend  at  a  fixed  rate.  The  deferred  stock  is  called  A 
stock  and  the  preferred  stock  is  called  B  stock  . 

This  B  or  preferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called  pre- 
ferred stock  is  in  Great  Britain  called  preference  stock  and 
preference  stock  in  Cireat  Britain  may  be  divided  into  two 
or  more  classes  called  first  preference,  second  preference,  etc., 
just  as  preferred  stock  in  the  United  States  may  be  divided 
into  tw^o  or  more  classes  called  first  preferred,  second  pre- 
ferred, etc.  When,  however,  there  is  but  one  class  of  prefer- 
ence stock  ahead'  of  an  ordinary  stock  in  Great  Britain  the  B 
or  preferred  stock  is  equivalent  to  second  preferred  stock  in 
the  United  States. 

Deficiency  as  regards  contributories.  English  term ;  it 
means  that  the  creditors  ma}'  be  paid  in  full,  although  the 
shareholders  (stockholders),  who  are  the  contri1)utories,  lose; 
chiefly  used  in  "winding  up"  proceedings. 


156  SMITH'S  FINANCIAL  DICTIONARY. 

Deficiency  judgment.  A  judgment  ordered  by  the  court  for 
any  balance  of  a  debt  remaining  after  the  security  has  been 
sold  and  the  proceeds  applied  to  the  payment  thereof. 

Del  credere.  The  obligation  undertaken  by  a  factor  or 
agent  when  selling  goods  on  credit  to  hold  himself  liable  in 
case  of  the  failure  of  the  purchaser  to  pay. 

A  del  credere  commission  is  a  commission  charged  for  guar- 
anteeing the  credit  or  solvency  of  a  person  to  whom  goods 
are  sold. 

Delegation.  Abbreviated  name  for  letter  of  delegation ;  see 
Letter  of  delegation. 

The  term  delegation  is  also  used  when  an  original  debtor 
presents  to  his  creditor  a  third  person  who  becomes  obligated 
in  his  stead. 

Deliver  ticket.  A  memorandum  ticket  sent  by  the  seller 
of  stocks  or  bonds  to  the  buyer  in  confirmation  of  the  trans- 
action previous  to  the  delivery  of  the  securities.  For  addi- 
tional information  see  Comparison. 

Delivery,  A.  Stocks  and  bonds  are  a  delivery  (are  deliver- 
able) in  fulfilment  of  contracts  entered  into  on  the  New  York 
Stock  Exchange  which  meet  all  requirements  of  the  exchange 
(see  Rules  for  delivery)  ;  others  are  not  a  delivery  (are  not 
deliverable). 

The  rules  of  the  New  York  Stock  Exchange  are  generally 
observed  in  transactions  in  stocks  and  bonds  that  take  place 
elsewhere  than  on  the  exchange. 

The  term  delivery  is  also  used  in  dealings  in  grain,  cotton, 
coffee,  etc. 

When  applied  to  negotiable  instruments  the  term  delivery 
means  transfer  of  possession,  actual  or  constructive,  from  one 
person  to  another. 

Delivery  day.  In  dealings  in  grain,  cotton  and  cofifee  the 
first  business  day  of  the  month  is  known  as  delivery  day.  As, 
however,  all  sales  are  at  seller's  option  the  seller  may,  on  due 
notice  to  the  buyer,  make  delivery  on  any  day  of  the  month  in 
which  the  contract  matures. 

Delivery  of  stocks  and  bonds.  The  seller  of  stocks  or  bonds, 
when  the  transaction  occurs  on  an  exchange,  must  deliver  the 
securities  and  collect  for  them  at  the  buyer's  place  of  business. 


SMITH'S  FINANCIAL  DICTIONARY.  157 

In  a  transaction  on  the  New  York  Stock  Exchange,  where 
settlements  are  made  daily,  the  broker  who  sells  a  stock 
regular  way  (in  the  regular  way)  delivers  it  to  the  buyer  on 
the  following  day  (except  Saturday — when  a  stock  is  sold  on 
Friday  it  is  delivered  on  Monday).  In  the  case  of  a  cash 
transaction  the  stock  is  delivered  the  same  day. 

For  information  as  to  what  constitutes  a  delivery  (often 
called  good  delivery)   see  Rules  for  delivery. 

Demand.  As  applied  to  a  bill  of  exchange  (draft)  or  prom- 
issory note  this  term  means  that  the  bill  or  note  is  payable 
on  demand  (on  presentation  to  the  one  who  is  to  pay  it)  and 
that  no  grace  is  allowed  on  it  (unless,  as  in  some  states  and 
countries,  grace  is  allowed  by  law). 

It  is  a  common  practise  to  speak  of  a  demand  bill  of  ex- 
change (draft)  issued  by  a  bank  or  banker  as  a  check,  for  it, 
like  a  check,  is  payable  on  presentation ;  a  time  bill  is  a  draft, 
but  as  it  is  not  payable  on  presentation  it  has  not  one  of  the 
principal  requisites  of  a  check.  A  sight  bill  is  the  same  as  a 
demand  bill  except  in  states  and  countries  where  grace  is 
allowed  by  law  on  a  sight  bill. 

Demand  bill.  A  bill  of  exchange  (draft)  payable  on  de- 
mand (on  presentation). 

Demand  note.  A  promissory  note  payable  on  demand  (on 
presentation). 

Demand  paper.  Paper  (promissory  notes  and  bills  of  ex- 
change or  drafts)  payable  on  demand — that  is,  payable  on  pre- 
sentation. 

Demonetize.  To  divest  of  the  character  of  standard  money, 
as  the  demonetization  of  silver. 

Demurrage.  When  railroad  cars  or  vessels  are  detained 
beyond  the  stipulated  time  allowed  for  loading  or  discharging 
freight  a  charge  for  this  loss  of  time  is  made  which  is  called 
demurrage. 

The  charge  of  i  1-2  pence  per  ounce  that  is  exacted  by  the 
Bank  of  England  for  exchanging  gold  coin  or  notes  for  gold 
bullion  is  called  demurrage. 

Denomination.  A  designation  for  an  amount  in  money,  or 
value,  as  a  bill  (piece  of  paper  money)  of  the  denomination  of 
$100    or  a  bond  of  the  denomination  of  $1,000    or  a  share  of 


J58  SMITH'S  FINANCIAL  DICTIONARY. 

stock  of  the  denomination  of  $ioo  or  a  Bank  of  England  note 
of  the  denomination  of  £25. 

Deport.  On  the  Paris  Bourse  this  word  means  the  same  as 
backwardation  in  London  or  the  same  as  premium  in  New 
York. 

Deposit.  A  deposit  in  a  bank  is  money  (or  checks,  drafts, 
etc.)  placed  in  the  bank  to  the  credit  of  the  one  so  placing  or 
depositing  it. 

A  general  deposit  with  a  bank  is  a  deposit  received  and 
placed  with  the  funds  of  the  bank  to  be  loaned  to  customers 
and  used  in  the  general  business  with  other  funds  of  the  bank. 
A  special  deposit  is  a  deposit  for  safe  keeping;  to  be  kept  as 
received  until  called  for. 

Deposit  account.  In  Great  Britain  a  deposit  account  in  a 
bank  is  one  in  which  money  deposited  remains  on  deposit  by 
agreement  for  a  specified  time  and  draws  interest  at  a  specified 
rate.  On  the  other  hand,  a  current  or  drawing  account  is  one 
which  may  be  added  to  and  drawn  against  at  will — at  any 
time. 

Depositary.  An  individual  (or  firm)  with  whom  funds  or 
property  is  deposited.  It  is  a  common  practise  to  designate  as 
a  depositary  a  bank,  trust  company  or  other  financial  institu- 
tion with  which  funds  or  property  is  deposited ;  the  correct 
designation  is  depository ;  see  Depository. 

Deposit  book.  The  book  held  by  a  depositor  in  a  bank  in 
which  are  entered  the  sums  placed  to  his  credit  and  in  which, 
when  a  balance  is  struck  at  intervals,  the  amount  of  the  debits 
also  is  entered. 

Deposit  on  a  contract.  A  deposit  to  guarantee  the  fulfil- 
ment of  a  contract.  For  additional  information  see  Mutual 
deposits  on  a  contract. 

Depositor.  One  who  deposits  money  (or  the  e([uivalent  of 
money,  as  checks,  drafts,  etc.)  in  a  bank  to  be  placed  to  his 
credit  is  a  depositor. 

A  bank  agrees  with  a  depositor  that  it  will  pay  out  his 
money  in  accordance  with  his  directions  and  not  otherwise. 
If  he  orders  money  to  be  paid  to  a  s])ecified  person  and  then 
revokes  the  order  before  the  bank  has  either  made  the  pay- 
ment or  obligated  itself  to  do  so  (as,  for  instance,  by  certify- 


SMITH'S  FINANCIAL  DICTIONARY.  159 


ing  the  check)  it  is  the  duty  of  the  bank  to  obey  the  revocation 
and  refuse  to  make  the  payment.  Tf  it  pays  the  check  not- 
withstanding the  revocation  the  payment  cannot  be  charged 
against  the  depositor. 

In  a  case  in  New  York  state  an  agreement  was  entered  into 
between  the  depositor  and  the  bank  to  the  effect  that  the  bank 
woukl  endeavor  to  execute  all  orders  revoking  checks,  but  that 
the  depositor  was  not  to  hold  it  liable  for  damages  in  case  it 
failed  to  do  so.  The  hank  paid  an  uncertified  check  after 
notice  had  been  given  to  it  not  to  do  so  and  the  court  held  it 
liable,  notwithstanding  the  terms  of  the  agreement  between 
the  depositor  and  the  bank.  The  decision  was  upon  the  ground 
that  the  bank  was  bound  to  use  ordinary  diligence  to  obey  all 
orders  revoking  checks  and  by  failure  to  do  so  it  became  liable, 
as  any  agent  is  liable  for  negligence,  notwithstanding  its 
agreement  with  the  depositor. 

In  New  York  state  the  court  has  held  that  a  bank  cannot 
"disobey  his  (a  depositor's)  orders,  either  wilfully  or  inno- 
cently and  then  claim  a  new  and  different  relation  with  rights 
inconsistent  with  such  as  before  existed.  In  paying  a  draft 
after  payment  has  been  stopped  a  bank  cannot  be  protected 
without  an  essential  change  in  the  accustomed  and  commonly 
understood  duty  which  it  owes  to  its  depositor  or  a  total  dis- 
regard of  its  obligation  to  him." 

Depository,  A  bank,  trust  company  or  other  financial  in- 
stitution with  which  funds  are  deposited ;  or  a  safe  deposit 
company,  storage  or  warehouse  company  or  other  concern 
with  which  papers  or  property  may  be  deposited  for  safe  keep- 
ing. ^^'hen  an  individual  or  firm  receives  deposits  of  money, 
papers  or  property  the  word  depositary  applies. 

Deposit  rate.  The  rate  of  interest  allowed  by  a  l)ank  on 
deposits. 

Deposit  slip.  The  printed  form  upon,  which  a  depositor  in 
a  bank  enters  the  amounts  of  checks,  money,  etc.,  to  be  placed 
to  his  credit  in  the  bank. 

The  English  name  for  depos'.t  slip  is  credit  slip  or  paying  in 
slip. 

Depreciated  currency.  Paper  money  is  a  depreciated  cur- 
rencv  when  its  purchasing  power  as  compared  with  gold  has 


i6o  SMITH'S  FINANCIAL  DICTIONARY. 

fallen,  or  in  other  words,  when  prices  as  expressed  in  paper 
money  have  risen. 

If  IOC  gold  dollars  cost  200  paper  dollars  gold  money  is  at  a 
premium  of  100  per  cent  and  paper  money  is  at  a  discount  of 
50  per  cent.  The  same  holds  true  of  silver  or  any  other  form 
of  money  which  for  any  reason  is  less  valuable  than  the  money 
which  is  the  actual  standard. 

Destroyed  or  defaced  securities.  A  new  certificate  can  be 
secured  in  place  of  a  destroyed  stock  or  bond  by  furnishing 
proof  of  destruction,  together  with  a  bond  of  indemnity  for 
double  the  amount  of  the  stock  certificate  or  bond.  A  de- 
faced stock  certificate  or  bond,  if  the  defacement  does  not 
obliterate  amounts  and  names,  can  generally  be  exchanged  for 
a  new  one  by  ordinary  transfer. 

Dicker,  Designation  for  a  petty  business  negotiation  or 
trade.  To  dicker  is  to  bargain  or  to  haggle  over  price  or 
terms.  _ 

Dies  gratia.     Days  of  grace. 

Dies  non.  Days  on  which,  owing  to  some  circumstance  or 
event,  no  business  is  transacted. 

Difference.  The  difiference  between  the  purchase  and  sale 
price  of  a  stock ;  also,  the  amount  of  profit  or  loss  on  a  trans- 
action. 

Speculating  for  differences  means  that  persons  buy  securi- 
ties with  the  intention  of  later  selling  them  or  sell  securities 
short  wath  the  intention  of  later  buying  them — the  sole  pur- 
pose being  to  profit  by  differences  between  buying  and  selling 
or  between  selling  and  buying  prices. 

Also  see  Market  difference. 

At  a  clearing  house  for  banks  only  differences  (or  balances) 
are  settled.  For  information  see  Clearing  house  of  the  asso- 
ciated banks  of  New  York. 

For  information  as  to  the  settlement  at  a  clearing  house  of 
differences  in  transactions  in  stocks  see  New  York  Stock  Ex- 
change clearing  house. 

Also  see   Ringing  out. 

On  the  London  Stock  Exchange  differences  are  paid  or  re- 
ceived in  each  fortnightly  settlement  on  such  contracts,  or 
bargains  as  they  are  called  in   London,  as  are  carried  over — 


SMITH'S  FINANCIAL  DICTIONARY.  i6i 

that  is,  contracts  under  which  the  receipt  and  payment  (or  the 
delivery  and  collection)  for  the  securities  designated  in  them 
is  to  be  continued  to  the  next  settlement. 

There  is  an  official  settling  price  for  each  security  which  is 
called  the  "making-up"  price.  One  who  carries  over  (con- 
tinues) a  contract  pays  or  receives,  as  the  case  may  be,  the 
difference  between  the  making-up  price  and  the  price  specified 
in  his  contract.  Then  the  making-up  price  becomes  the  con- 
tract price  and  is  the  basis  for  the  next  settlement,  which  may 
or  may  not  be  the  final  settlement,  for  the  contract  may  be 
carried  over  again. 

Differential  duty.  Import  duty  or  tax  imposed  unequally 
on  the  products  of  different  nations. 

Differential  rate.  A  lower  rate  by  one  transportation  line 
than  by  another  reaching  the  same  point  or  a  lower  rate  to 
one  point  than  to  another  point  competing  for  the  same  traffic. 

Digested.  For  the  application  of  this  word  in  dealings  in 
securities  see  Absorbed. 

Dime.  (Formerly  disme).  The  silver  coin  of  the  United 
States  that  is  worth  lO  cents ;  it  weighs  38.58  grains,  is  .032 
inch  thick,  and  its  diameter  is  .7  inch. 

Direct  exchange.  Exchange  between  two  places — that  is, 
between  two  places  in  one  country  or  between  a  place  in  one 
country  and  a  place  in  another  country.  For  example,  ex- 
change between  New  York  and  Chicago  or  exchange  between 
New  York  and  London  is  direct  exchange. 

Indirect  exchange  is  where  three  or  more  places  are  in- 
volved ;  see  Indirect  exchange. 

Direct  liabilities.  Obligations  or  debts  which  are  deter- 
mined and  not  contingent  and  which  are  an  undisputed  claim. 

Director.  A  member  of  a  body  (board  of  directors)  chosen 
(elected)  by  the  stockholders  of  a  corporation  to  direct  and 
manage  the  affairs  of  the  corporation.  The  board  of  directors 
selects  and  elects  from  its  members  the  president,  vice-presi- 
dent  and  other  general  officers  of  the  company. 

The  directors  of  a  corporation  are  usually  elected  annually. 
There  is,  at  any  rate,  an  annual  election  for  directors,  but  when 
a  board  of  directors  is  divided  into  classes  the  terms  of  the 
directors  are  for  more  than  one  vear.     Thus,  if  a  board  of  di- 


i62  SMITH'S  FINANCIAL  DICTIONARY. 

rectors  is  divided  into  three  classes  the  directors  are  elected 
to  serve  three  years,  but  each  year  the  term  of  one  class  ex- 
pires. The  term  of  class  B  (or  class  2)  expires  the  year  after 
the  term  of  class  A  (or  class  i)  and  the  term  of  class  C  (or 
class  3)  expires  the  year  after  the  term  of  class  B. 

Under  such  an  arrangement,  of  course,  when  the  board  of 
directors  is  originally  created  the  directors  of  class  A  (or  class 
i)  are  elected  to  serve  one  year,  the  directors  of  class  B  (or 
class  2)  to  serve  two  years  and  the  directors  of  class  C  (or 
class  3)  to  serve  three  years.  Thereafter  directors  are  elected 
to  serve  the  full  term  of  three  years,  except  as  vacancies  are 
to  be  filled,  when  directors  are  elected  to  serve  for  unexpired 
terms,  whatever  the  duration  of  them  may  be. 

A  board  of  directors  can  act  legally  only  as  a  board ;  the 
action  or  promise  of  a  director  by  himself  is  not  binding  on 
the  board  or  on  the  company. 

If  a  director  enters  into  a  contract  with  his  corporation  he 
does  not  thereby  forfeit  his  position  as  director.  Neither  is 
the  contract  void,  but  it  is  voidable  at  the  suit  of  any  dissatis- 
iied  stockholder. 

When  it  is  provided  by  the  law  under  which  a  corporation 
is  organized  or  by  its  by-laws  how  and  when  a  resignation  is 
to  become  efifective  that  rule  governs.  If  there  is  no  such  pro- 
vision the  resignation  becomes  effective  as  soon  as  it  is  com- 
municated in  writing  to  the  board  of  directors  and  its  formal 
acceptance  or  entry  upon  the  minute  books  of  the  corporation 
is  not  necessary. 

The  fee  paid  to  a  director  for  attending  a  meeting  is  usually 
$10  and  the  fee  is  usually  paid  in  a  single  gold  piece. 

Directorate.  A  word  sometimes  used  in  place  of  board  of 
directors.    ~ 

Director  of  the  Mint.  The  Director  of  the  Mint  is  the  chief 
cfilicer  of  the  Bureau  of  the  Mint  in  the  Treasury  Department 
of  the  United  States.  He  has  the  general  direction  of  the 
operations  of  the  mints  and  assay  offices  of  the  United  States, 
subject  only  to  the  authority  of  the  .Secretary  of  the  Treasury. 

Directory.  A  word  sometimes  used  in  place  of  board  of 
directors. 

Direct  tax.     A  tax  paid  at  first  hand  by  the  owner  of  the 


SMITH'S  FINANCIAL  DICTIONARY.  163 

thing  taxed,  as  land,  in  distinction  from  excise  and  customs 
dues. 

Disagio.  The  discount  charged  for  cashing  foreign  or  de- 
preciated currency. 

Discharge  of  record.  The  entry  of  a  release,  satisfaction  or 
acquittance  of  a  debt  of  record  (a  judgment). 

Discharging  a  contract.    The  act  of  making  a  contract  null. 

Discount.  The  amount  taken  off;  allowance  for  prompt 
payment ;  interest  deducted  or  collected  in  advance. 

A  promissory  note  is  discounted  when  the  lender  on  it  de- 
ducts (or  collects)  the  amount  of  the  interest  on  the  note  at 
the  time  he  advances  money  on  it. 

A  bill  of  exchange  (draft)  is  discounted  when  the  purchaser 
buys  it  for  less  than  its  face  value ;  the  discount  is  the  differ- 
ence between  the  face  value  of  the  draft  and  the  amount  paid 
for  it. 

In  discounting  interest-bearing  paper  the  interest  should 
first  be  charged  on  the  face  amount  of  the  paper  and  then  cred- 
ited on  the  amount  of  the  discount.  Illustration :  At  6  per 
cent  the  discount  on  paper  for  $10,000  having  one  year  to  run 
is  $600,  but  as  this  $600  is  not  paid  over  interest  has  to  be 
allowed  on  it  by  the  lender  at  the  same  rate  as  is  charged  b}^ 
the  lender  on  the  whole  $10,000.  The  interest  on  the  $600 
amounts  to  $36  which  would,  therefore,  make  the  sum  received 
by  the  maker  of  the  paper  $9,436. 

When  non-interest-bearing  paper  is  discounted  the  discovmt 
is  the  difference  between  the  face  value  of  the  note  (the 
amount  which  is  to  be  paid  at  maturity)  and  the  amount  paid 
for  the  note. 

Foreign  bills  of  exchange  are  not  said  to  have  been  dis- 
counted, but  instead  to  have  been  sold. 

Discount  bank.  Same  as  bank  of  discount ;  a  bank  which 
discounts   (buys)   promissory  notes  and  bills  of  exchange. 

Discount  broker.  Same  as  note  broker;  one  who  negotiates 
the  sale  of  commercial  paper  (promissory  notes  and  bills  of 
exchange  or  drafts). 

Discount  clerk.  The  particular  duty  of  a  discount  clerk  in 
a  bank  is  to  keep  a  record  of  and  retain  the  custody  of  notes 
and  drafts  until  their  maturitv,  when  thev  are  delivered  to  the 


i64  SMITH'S  FINANCIAL  DICTIONARY. 


note  teller,  who  attends  to  the  collection  of  the  amounts  due 
on  them. 

Discount  house.  This  term  is  applied  to  a  firm  or  company 
in  Great  Britain  which  makes  a  business  of  discounting  bills 
(the  paper  of  merchants  and  others). 

Discretionary  account.  In  speculation  (as  in  stocks)  a  dis- 
cretionary account  is  an  account  the  handling  of  which  is  en- 
trusted to  the  broker  with  whom  it  is  opened. 

Sometimes  fraud  is  practised  by  a  dishonest  broker  in 
handling  a  discretionary  account.  Such  a  broker  will  retain 
profit  for  himself  while  charging  loss  to  the  customer. 

One  way  in  which  a  broker  may  practise  fraud  while  im- 
parting a  semblance  of  honesty  and  regularity  to  an  operation 
is  to  make  an  actual  purchase  and  simultaneously  make  an 
actual  sale ;  then,  after  there  has  been  a  change  (an  advance, 
or  a  decline)  in  the  price,  make  another  actual  purchase  and 
simultaneously  an  actual  sale.  The  difiference  between  the 
price  at  which  the  first  transactions  are  made  and  the  price 
at  which  the  second  transactions  are  made  the  broker  may  de- 
duct from  the  amount  deposited  with  him  as  margin  by  the 
customer  and  keep  for  himself  while  reporting  it  to  the  cus- 
tomer as  a  loss  sustained.  The  broker  is  in  a  position  to  show 
by  others  with  whom  he  dealt  that  actual  transactions  wxre 
made,  but  need  not  reveal  such  of  the  transactions  as  would 
disclose  sales  offsetting  the  purchases  and  purchases  offsetting 
the  sales,  by  which  one  transaction  voided  another,  with  the  re- 
sult that,  as  a  fact,  no  stock  was  really  at  any  time  carried 
(held)  by  the  broker. 

Discretionary  order.  An  order  given  to  a  broker  to  execute 
in  his  discretion ;  entrusting  money  to  a  broker  to  speculate 
with  as  he  sees  fit,  but  for  the  benefit  or  risk  of  the  owner. 

For  additional  information  see  Discretionary  account. 

Discretionary  pool.  Several  contribute  capital  to  a  pool 
the  manager  of  which  is  allowed  to  use  the  money  in  specula- 
tion (or  in  a  deal)  in  his  discretion,  or  in  other  words,  as  he 
sees  fit;  similar  to  a  blind  pool. 

Discretionary  trust.  One  requiring  for  its  proper  adminis- 
tration by  the  trustee  the  application  of  prudence  and  judg- 
ment. 


SMITH'S  FINANCIAL  DICTIONARY.  163 

Discrimination  in  loans.  Means  that  certain  securities  are 
refused  as  collateral  by  lenders  after  having  been  accepted 
as  security  for  previous  loans.  These  securities  are  discrimi- 
nated against,  usually,  because  a  change  in  market  conditions 
has  rendered  them  especially  uncertain  in  value. 

Discussion.  A  proceeding  upon  the  part  of  a  surety  by 
which  the  property  of  the  principal  is  exhausted  before  resort 
can  be  had  to  the  surety. 

Dishonored.  Said  when  acceptance  of  a  bill  of  exchange 
(draft)  is  refused  on  presentation ;  or  when  payment  of  a  bill 
of  exchange  or  promissory  note  is  refused  at  maturity. 

Disme.  Former  spelling  of  dime,  the  silver  coin  of  the 
United  States  worth  10  cents ;  see  Dime. 

Dissolution.  The  annulment  of  a  contract;  also  the  ending 
of  a  partnership  or  a  corporate  existence. 

Dividend.     A  profit  paid  to  a  holder  of  stock. 

A  cash  dividend  is  one  payable  in  cash,  that  is,  by  check 
which  calls  for  cash ;  a  scrip  dividend  is  one  payable  in  scrip, 
or  in  other  words,  a  due  bill,  usually  bearing  interest  at  the 
legal  rate  and  usually  convertible  into  stock,  but  having  no 
voting  power  and  entitled  to  no  dividend  until  converted  into 
stock ;  a  stock  dividend  is  one  pa^^able  in  the  stock  of  the 
company  which  declares  such  a  dividend  or  occasionally  in  the 
stock  of  a  company  owned  by  it ;  a  cumulati-ve  dividend  is  a 
dividend  which  if  not  paid  regularly  or  in  full  accumulates  and 
must  be  paid  in  the  future ;  a  non-cumulative  dividend  is  a  divi- 
dend that  does  not  accumulate  and  therefore  if  not  paid  regu- 
larly or  in  full  has  not  to  be  paid  in  the  future;  accumulated 
dividends  are  cumulative  dividends  past  due  ;  accrued  dividend 
is  the  proportion  of  a  regular  dividend  not  yet  payable  that  has 
accumulated  at  a  given  time  after  the  date  of  payment  of  the 
last  preceding  dividend. 

A  cash  dividend  is  sent  by  check  to  the  post  office  address 
of  the  owner  of  the  stock.  Due  notice  of  change  of  address 
should,  therefore,  be  given.  The  old  address  should  be  given 
as  well  as  the  new  one. 

When  a  dividend  is  paid  on  a  stock  during  the  pendency  of  a 
contract  for  the  sale  of  the  stock  the  seller  of  the  stock  receives 


i66  SMITH'S  FINANCIAL  DICTIONARY. 

the  dividend  and  pays  it  to  the  buyer  of  the  stock  on  the  settle- 
ment of  the  contract,  together  with  interest  on  it. 

Brokers  charge  i  per  cent  of  the  amount  of  dividends  for 
collecting  them  or  for  paying  them,  but  when  a  dividend  is  in 
scrip  or  stock  the  i  per  cent  is  on  the  market  value  and  not 
on  the  par  value. 

The  closing  of  the  stock  transfer  books  of  a  company  estab- 
lishes the  right  to  dividends  as  between  the  company  and  those 
who  claim  the  dividend,  but  it  does  not  affect  the  rights  of  a 
buyer  and  a  seller  of  stock  as  between  themselves.  When 
stocks  are  sold  at  an  exchange  the  rules  of  that  body  deter- 
mine whether  the  seller  or  the  buyer  is  entitled  to  the  divi- 
dends. In  a  sale  made  elsewhere  the  seller  and  buyer  may 
make  such  agreement  as  may  be  mutually  satisfactory.  If  the 
sale  is  not  made  at  an  exchange  and  the  question  of  the 
dividend  is  not  determined  by  mutual  agreement  the  seller 
is  entitled  to  all  dividends  on  the  stock  declared  before  the 
sale  and  the  buyer  is  entitled  to  all  declared  after  the  sale.  It 
is  of  no  importance  that  a  transfer  may  not  have  been  made 
upon  the  books  or  that  the  stock  may  not  have  been  delivered 
or  that  the  dividend  is  not  payable  until  some  time  after  the 
date  on  which  it  is  declared. 

When  a  speculator  is  short  of  a  stock  (has  sold  stock  which 
he  did  not  own)  on  which  a  dividend  becomes,  due  he  has  to 
pay  the  amount  of  the  dividend  to  the  person  from  whom  he 
borrowed  stock  to  make  delivery  to  the  one  to  whom  he  sold 
the  stock. 

Dividend  off.  Said  when  a  dividend  due  is  not  included  in 
the  sale.  A  stock  sold  ex-dividend  is  sold  with  the  divi- 
dend off. 

Dividend  on.  Said  when  a  dividend  on  a  stock  goes  with 
the  stock  to  the  buyer. 

The  corresponding  term  on  the  London  Stock  Exchange 
is  cum  dividend;  cum  means  with  (included). 

Dividend  warrant.  English  name  for  a  check  issued  in  pay- 
ment of  a  dividend. 

Divisional  bond.  A  bond  issued  under  a  mortgage  on  prop- 
erty in  one  division  of  a  railroad. 


SMITHS  FINANCIAL  DICTIONARY.  167 

Divisional  coin.  Same  as  fractional  or  subsidiary  coin  ;  see 
Subsidiary  coin. 

Divisional  mortgage.  A  mortgage  covering  the  property 
included  in  one  division  of  a  railroad. 

Documentary  bill  for  acceptance.  A  time  draft  (bill  of  ex- 
change) draAvn  on  the  receiver  or  consignee  of  a  shipment  of 
property  and  accompanied  by  documents.  The  documents, 
comprising  the  bill  of  lading,  policy  of  insurance,  etc.,  are 
attached  to  the  draft  and  are  surrendered  on  the  acceptance  of 
the  draft  by  the  consignee  so  that  the  consignee  may  at  once 
obtain  possession  of  the  property  instead  of  waiting  until 
actual  payment  of  the  bill  is  made. 

lixample :  A  in  New^  York  makes  a  shipment  of  goods  to  B 
in  London  for  which  payment  is  to  be  made  at  some  future 
time,  say  in  three  months.  It  is  not  necessary  for  A  to  wait 
three  months  for  his  money.  A  draws  on  B  for  the  amount  of 
the  goods  (that  is,  the  amount  in  money)  and  attaching 
to  the  draft  the  bill  of  lading  for  the  goods,  with  policy 
of  insurance,  etc.,  sells  the  draft  to  a  dealer  in  foreign 
exchange  in  New  York,  who  forwards  it  to  his  corre- 
spondent in  London.  The  correspondent  in  London  presents 
the  l)ill  to  B  in  London  for  acceptance.  B  writes  on  its  face 
his  acceptance  (an  acknowledgment  of  the  obligation  and  a 
promise  to  pay  it  when  due)  and  the  bill  of  lading  is  sur- 
rendered to  him.  Possession  of  the  bill  of  lading  gives  him 
possession  of  the  goods.  In  the  meantime  A  has  been  paid  for 
the  goods  while  B  when  he  formally  obligates  himself  to  pay 
for  them  knows  not  only  that  they  have  been  shipped  Init  also 
holds  (in  the  bill  of  lading)  title  to  them. 

A  draft  payment  of  which  is  to  be  made  on  presentation  (a 
sight  draft,  in  other  words)  is.  when  accompanied  by  docu- 
ments, termed  a  documentary  bill  for  payment,  as  distin- 
guished from  a  documentary  bill  for  acceptance. 

Documentary  bill  for  payment.  A  draft  (bill  of  exchange) 
drawn  on  the  receiver  or  consignee  of  a  shipment  of  ])roperty 
to  which  are  attached  documents,  comprising  the  bill  of  lading, 
policy  of  insurance,  etc.  On  the  payment  of  the  draft  the  bill 
of  lading,  together  with  the  other  papers,  is  surrendered  to  the 
consignee  so  that  he  may  obtain  possession  of  the  propertv. 


i68  SMITH'S  FINANCIAL  DICTIONARY. 

Example :  A  in  New  York  makes  a  shipment  of  goods  to  B 
in  London  for  which  immediate  payment  is  ^.o  be  made.  A 
makes  a  draft  on  B  for  the  amount  of  the  goods  (that  is,  for 
the  amount  in  money)  and  attaching  to  it  the  bill  of  lading 
for  the  goods  sells  the  draft  to  a  dealer  in  foreign. exchange  in 
New  York,  who  forwards  it  to  his  correspondent  in  London 
for  collection  from  B  in  London.  Thus,  A  receives  pay  for 
his  goods  as  soon  as  they  are  shipped.  He  has  not  to  ship  the 
goods,  wait  for  them  to  reach  London,  and  then  wait  for  a 
ship  to  bring  back  gold  in  payment  for  them,  nor  even  to  wait 
for  the  mail  to  bring  back  a  draft  bought  by  B  in  London  on 
some  bank  or  banker  in  New  York ;  much  less  has  he  to  wait 
for  B  to  receive  the  goods,  draw  a  check  on  his  own  (B's) 
bank  in  London,  and  send  it  to  him  (A  in  New  York),  who 
would  have  to  sell  the  check  to  some  dealer  in  foreign  ex- 
change in  New  York.  B,  by  receiving  the  bill  of  lading  for 
the  goods  when  the  draft  is  presented  to  him  for  payment, 
knows  not  only  that  the  goods  have  been  shipped  to  him,  but 
also,  by  possession  of  the  bill  of  lading,  holds  actual  title 
to  them. 

Documentary  bill  (of  exchange).  A  bill  of  exchange  to 
which  are  attached  certain  documents,  usually  the  bill  of  lad- 
ing, policy  of  insurance  and  instrument  of  hypothecation.  For 
additional  information  see  Documentary  bill  for  acceptance ; 
also  see  Documentary  bill  for  payment. 

Documentary  commercial  bill  (of  exchange).  A  bill  of  ex- 
change drawn  against  merchandise  or  manufactures  or  pro- 
duce (as  grain,  cotton  or  provisions,  etc.)  to  which  are  at- 
tached documents,  such  as  bill  of  lading,  policy  of  insurance 
and  instrument  of  hypothecation. 

For  additional  information  see  Documentary  bill  for  accept- 
ance ;  also  see  Documentary  bill  for  payment. 

Dollar,  The  monetary  unit  of  the  United  States,  equal  to 
one-tenth  of  an  eagle,  or  loo  cents  (about  4s.  i  i-3d.  English 
money). 

In  theory  the  gold  dollar  contains  25.8  grains,  nine-tenths 
fine.  As  a  matter  of  fact  the  gold  dollar  is  no  longer 
coined,  being  too  small  for  convenience.  The  dollar  is  repre- 
sented  in  actual   circulation  by  silver  and  notes.     The  silver 


SMITH'S  FINANCIAL  DICTIONARY.  i6o 

dollar  weighs  412  1-2  grains  (371  1-4  grains  of  silver  and 
41  1-4  grains  of  alloy). 

The  United  States  silver  dollar  was  based  upon  the  Spanish 
milled  dollar,  the  piece  which  probably  first  bore  the  raised 
and  corrugated  edge,  which  was  devised  to  prevent  the  re- 
duction of  the  coin  by  cutting  ofif  the  rim.  The  name  is  de- 
rived from  the  German  thaler,  which  apparently  was  first 
issued  by  a  community  of  Joachims-thal  in  South  Germany, 
whose  pieces  were  of  known  purity  and  unchanging  value. 

The  dollar  is  also  the  unit  of  value  of  Canada,  which  is  a 
gold  standard  country,  but  has  no  gold  coins  of  its  own. 
Neither  has  Canada  a  silver  dollar ;  its  silver  coins  are  of  de- 
nominations less  than  $1.  The  dollar  is  also  the  unit  of  value 
of  Newfoundland  (gold  standard).  Newfoundland  has  no 
silver  dollar,  but  it  has  a  $2  silver  piece  and  it  has  pieces  of 
less  denomination  than  $1. 

Coins  of  other  countries  comparing  with  the  dollar  are  the 
thaler  of  Germany,  Norway,  Sweden  and  Denmark,  the  pis- 
tole or  piece-of-eight  of  Spain,  the  20-piastre  piece  of  Egypt, 
the  peso  of  ^^lexico  and  Central  America  and  the  gourde  of 
Hayti. 

Dollar  bond.     London  Stock  Exchange  name  for  a  bond  the 

principal  of  and  interest  on  which  are  payable  in  dollars,  as  is 
the  case  with  an  American  bond. 

Dollar  exchange.  Bills  of  exchange  (drafts)  drawn  in  a 
foreign  country  and  payable  in  America ;  so  called  because 
payment  is  to  be  made  in  dollars. 

Exchange  drawn  in  America  for  a  certain  number  of  dollars, 
although  to  be  paid  in  a  foreign  country  in  the  equivalent  in 
foreign  money,  is  also  dollar  exchange. 

Dollar  mark.  The  sign  $,  meaning  dollar  or  dollars  when 
placed  before  a  number ;  it  is,  according  to  some  authorities, 
U  S  in  composite  form. 

Dollar  of  the  daddies.  A  name  applied  to  the  silver  dollar 
during  the  agitation  for  free  silver  coinage. 

Dollar  stock.  London  Stock  Exchange  name  for  a  stock 
made  out  in  dollars,  as  an  American  stock. 

Domestic   commerce  or  trade.     Same  as  home   or  internal 


170  SMITH'S  FINANCIAL  DICTIONARY. 

commerce  or  trade ;  commerce  or  trade  exclusively  within  the 
limits  of  a  particular  country. 

Domestic  exchange.  Also  called  inland  exchange ;  ex- 
change between  two  places  in  the  same  country ;  in  other 
words,  drafts  or  orders  for  money  drawn  at  one  place  and 
payable  at  another  place  in  the  same  country. 

Drafts  constitute  the  commonest  form  of  domestic  exchange 
and  are  purchased  for  use  as  such  by  both  banks  and  indi- 
viduals. When  drawn  against  persons  to  whom  merchandise 
has  been  sold  they  are  known  as  commercial  bills. 

Domestic  exchange  is  calculated  in  only  one  kind  of  money, 
whereas  foreign  exchange  is  calculated  in  two  kinds. 
•  Following  is  an  illustration  of  the  use  of  domestic  exchange : 
A  merchant  in  Chicago  who  owes  for  goods  purchased  in  New 
York  can  in  discharging  his  obligation  buy  of  a  bank  or 
banker  in  Chicago  a  bill  of  exchange,  or  in  other  words,  a 
draft  or  order  for  money  which  is  payable  in  New  York  by 
the  correspondent  (a  l)ank  or  banker)  of  the  Chicago  bank  or 
banker. 

Again,  a  shipper  in  Chicago  may  forward  grain  to  New 
York  payment  for  which  is  due  on  the  arrival  of  the  grain 
at  destination.  He  draws  a  draft  or  order  on  the  consignee 
(the  receiver  of  the  grain  in  New  York).  This  bill  of  ex- 
change is  attached  to  the  bill  of  lading  (the  receipt  from  the 
railroad  or  other  carrying  company  which  transports  the 
grain)  and  is  sold  to  a  bank  in  Chicago.  The  Chicago  bank 
sends  it  to  its  correspondent  bank  in  New  York,  which  collects 
and  places  to  the  credit  of  the  Chicago  bank  the  amount  of  the 
draft  (bill  of  exchange). 

If  a  bank  in  Chicago,  for  instance,  has  an  inadequate  bal- 
ance, or  in  other  words,  too  small  an  amount  to  its  credit  with 
its  correspondent  in  New  York  it  may  pay  a  premium,  or  more 
than  the  face  value  of  it,  for  a  draft  payable  in  New  York  to 
be  used  in  increasing  its  balance  in  New  York  ;  likewise,  in 
such  circumstances,  if  it  sells  a  draft  on  New  York  it  may 
charge  a  premium,  or  more  than  its  face  value,  for  it.  On  the 
other  hand,  if  it  has  too  large  a  balance  in  New  York  and 
can  find  more  profitable  use  for  its  money  at  home  it  may  buy 
a  draft  on  New  York  onlv  at  a  discount,  or  less  than  its  face, 


SMITH'S  FINANCIAL  DICTIONARY.  171 

and  it  may  sell  one  at  little  or  no  premium,  and  perhaps  at  a 
discount. 

Exchange  is  in  favor  of  one  point  and  against  another  point 
Avhen  the  necessity  lor  remittance  from  the  second  point  to 
the  first  point  exceeds  the  necessity  for  remittance  from  the 
first  point  to  the  second  point. 

Instead  of  saying  exchange  on  Chicago  or  exchange  on 
Boston,  etc.,  it  is  the  common  practise  to  abbreviate  the  ex- 
pression to  Chicago  exchange  or  Boston  exchange,  etc. 

Domestic  exchange  loan.  There  is  practically  no  such  thing 
as  a  loan  of  domestic  exchange.  When  a  loan  is  obtained 
from  a  bank  it  ordinarily  delivers  to  the  borrower  a  check 
on  itself  made  out  by  its  cashier  (it  is  called  a  cashier's  check) 
which  the  borrower  may  use  in  the  place  where  issued  or  may 
transmit  to  any  other  place. 

The  bank  will,  if  desired,  furnish  to  the  borrower  a  draft  on 
a  bank  in  some  other  place,  but  this  draft  lacks  many  of  the 
characteristics  of  a  bill  of  exchange.  The  borrower  merely 
borrows  (obtains  a  loan)  and  it  is  a  matter  of  arrangement 
with  the  bank  as  to  the  form  in  which  he  shall  receive  the 
amount  which  he  borrows. 

Also  see  Foreign  exchange  loan. 

Domestic  exchange  rates.  Rates  for  domestic  exchange  is- 
sued in  New  York  are  not  published.  To  ascertain  the  rates  it 
is  necessary  to  make  inquiry  of  banks ;  the  business  is  almost 
entirely  in  the  hands  of  the  banks. 

At  other  points  the  rates  on  New  York  and  also  on  a  few 
other  important  centres  like  Boston,  Chicago,  San  Francisco, 
Philadelphia  and  St.  Louis  are  published.  When  quoted  in 
cents  (or  dollars)  it  is  meant  that  the  rate  is  so  much  premium 
or  discount,  as  may  be  specified,  on  each  $1,000.  In  some  in- 
stances the  rate  is  in  percentage — so  much  per  cent  premium 
or  discount. 

Domestic  trade.  Same  as  internal  trade  or  commerce ; 
home  trade ;  trade  within  the  boundaries  of  a  country. 

Domiciled.  When  paper  (a  promissory  note  or  a  bill  of  ex- 
change or  draft)  is  made  payable  in  a  certain  place  it  is  domi- 
ciled in  that  place. 

Domiciliated.     Same  as  domiciled ;  see  Domiciled. 


172  SMITH'S  FINANCIAL  DICTIONARY. 

Dormant  account.  An  account  to  which  neither  a  credit 
nor  a  debit  entry  has  been  added  for  a  protracted  period ;  in 
speculation,  an  account  in  which  a  protracted  period  has 
elapsed  since  entries  of  transactions  were  made. 

Dormant  judgment.  A  judgment  on  which  the  right  to 
issue  execution  has  expired  from  lapse  of  time. 

Dormant  partner.  A  partner  who  participates  in  the  profits 
of  the  firm,  but  takes  no  part  in  the  transaction  or  control  of 
the  firm's  business. 

Double-eagle.  The  name  given  to  the  $20  gold  coin  of  the 
United  States;  weight,  516  grains;  thickness,  .077  inch;  diam- 
eter, 1.35  inches. 

Double  entry.  The  system  of  bookkeeping  by  which  two 
entries,  one  credit  and  one  debit,  are  made  of  every  transac- 
tion. 

In  double  entry  a  day-book,  journal  and  ledger  are  the  es- 
sential books,  although  a  cash-book,  bill-book,  stock-book,  in- 
voice-book, etc.,  are  usually  added.  By  the  double  entry  sys- 
tem every  transaction  is  made  to  appear  on  the  record  as  both 
debtor  and  creditor  by  observance  of  the  principle  that,  in 
•every  instance,  the  thing  obtained  is  debtor  to  the  thing  given 
and  the  thing  given  is  creditor  of  the  thing  obtained. 

Double  liability.  When  the  liability  is  for  a  sum  double  the 
original  amount. 

The  holder  of  bank  stock  who  has  paid  in  full  for  it  still  is 
liable  up  to  the  amount  of  its  face  value  in  case  of  the  inability 
of  the  bank  to  pay  its  depositors  and  other  creditors  in  full. 

Double-name  paper.  Paper  (a  promissory  note  or  a  bill  of 
■exchange)  that  is  indorsed.  The  term  two-name  paper  is 
sometimes  used. 

Double  option.  London  Stock  Exchange  name  for  the  call 
of  more,  the  put  of  more,  or  the  put  and  call  when  combined. 
Another  name  is  compound  option.  In  New  York  a  put  and 
call  combined  are  called  a  spread  if  two  prices  are  named  in 
the  paper  (a  put  price  and  a  call  price)  or  a  straddle  if  only  one 
price  is  named  in  it  (at  which  price  the  stock  may  be  either 
put  or  called). 

Double  price.  On  the  London  Stock  Exchange  the  jobber 
(or  dealer),  wlio  will  cither  buy  or  sell,  names  a  price  at  which 


SMITH'S  FINANCIAL  DICTIONARY.  173 

he  will  buy  and  another  price  at  which  he  will  sell,  as  for  ex- 
ample, 99  3-4  at  which  he  will  buy  and  lOO  1-4  at  which  he 
will  sell.  In  such  a  case  the  quotation  would  be  printed: 
99  3-4—100  1-4. 

Double  standard.  The  double  standard  of  values  exists 
where  by  law  it  is  enacted  that  gold  and  silver  shall  be  ac- 
cepted as  a  legal  tender  for  debt  at  an  established  ratio. 

As  a  matter  of  fact  in  all  such  countries  gold  is  the  real 
measure  of  value  and  is  admitted  to  coinage  without  restric- 
tion, while  silver  is  coined  only  in  limited  quantities  and  under 
governmental  restriction  to  serve  as  representative  money. 
Silver  retains  its  parity  with  gold  because  of  the  limitations  on 
its  coinage  and  because  of  the  fiat  of  the  government  under 
whose  authority  it  is  coined. 

The  mere  possession  by  a  country  of  the  double  standard 
is  not  the  same  thing  as  bimetalism,  an  essential  feature  of 
which  is  a  mint  open  to  the  coinage  of  any  quantity  of  either 
gold  or  silver  that  may  be  brought  to  it. 

Doubtful  assets.     Assets  the  value  of  which  is  questioned. 

D.  P.  Abbreviation  for  document  (documentary  bill)  for 
payment ;  used  in  foreign  exchange  dealings.  See  Document- 
ary bill  for  payment. 

Draft.  An  order  drawn  by  one  person  on  another  for  the 
payment  of  money  to  a  third.  It  is  generally  payable  at  or 
collectable  through  a  bank  or  other  financial  agency.  There 
is  practically  no  difference  between  a  draft  and  a  bill  of  ex- 
change. The  term  draft,  however,  is  commonly  applied  to 
an  order  for  money  payable  within  the  United  States,  the  term 
bill  of  exchange  being  applied  to  an  order  payable  in  a  for- 
eign country. 

A  promissory  note  is  a  bill  of  exchange,  but  a  time  draft  be- 
comes, in  fact,  a  note  upon  its  acceptance  by  the  drawee — the 
one  upon  whom  it  is  drawn.  The  distinction  between  a  draft 
and  a  check  is  material  in  some  respects.  A  draft  is  dependent 
for  its  payment  upon  its  acceptance  by  the  person  on  whom  it 
is  drawn.  In  case  the  one  on  whom  it  is  drawn  refuses  to 
accept  it  or  pay  it  no  criminal  liability  attaches  to  the  drawer, 
whereas  a  check  is  drawn  against  a  supposed  deposit  of 
money  or  a  previously  established  credit  and  should  there  be 


174  SMITH'S  FINANCIAL  DICTIONARY. 

no  funds  to  meet  it  the  drawer  is  liable  to  criminal  prosecu- 
tion, and  a  refusal  of  the  bank  on  which  a  check  is  drawn  to 
pay  it,  if  there  are  funds  in  hand,  subjects  the  bank  to  civil 
action  for  injury  to  the  drawer's  credit  and  reputation. 

After  a  draft  is  accepted  it  becomes  a  promise  to  pay  on  the 
part  of  the  acceptor  and  he  can  be  held  thereon  as  on  a  note. 

The  holder  of  a  draft  who  gets  it  discounted  at  his  bank 
must  indorse  it  and  thus  he  also  becomes  responsible  for  it.  If 
it  goes  through  several  hands  each  holder  must  indorse  it  be- 
fore parting  with  it.  It  acquires  strength  with  each  indorse- 
ment since  all  the  persons  who  have  indorsed  it  are  successive- 
ly responsible  for  its  payment. 

In  the  case  of  a  draft  made  in  one  state  and  accepted  for  pay- 
ment in  another  state  any  question  as  to  its  legality  must  be 
tested  in  the  state  where  it  is  payable.  When  the  question  of 
interest  is  involved  interest  is  chargeable  at  the  legal  rate  of 
the  state  where  the  draft  is  payable. 

Also  see  Bill  of  exchange. 

Drawback.  Same  as  rebate ;  when  part  of  an  amount  paid 
is  returned  such  return  is  designated  a  drawback. 

A  drawback  on  imported  goods  on  which  duty  has  been  paid 
is  a  repayment,  in  part  or  in  whole,  of  the  duties  upon  the 
subsequent  exportation  of  the  same  goods  in  their  original  or 
in  another  form. 

A  drawback  on  freight  rates  is  a  repayment,  in  part,  of  the 
rates  (or  charges). 

Drawee.  The  party  who  is  to  pay  a  bill  of  exchange  or 
draft  (or  other  order  for  the  payment  of  money). 

Drawer.  The  party  who  draws  (issues)  a  bill  of  ex- 
change or  draft  (or  other  order  calling  for  the  payment  of 
money) . 

Drawing  account.  In  Great  Britain  a  drawing  account 
means  a  bank  account  which  permits  the  drawing  of  money  at 
any  time ;  a  deposit  account  means  money  left  in  the  bank  for 
a  stated  period  at  an  agreed  rate  of  interest. 

Drawn  bond.  One  drawn  for  redemption,  that  is,  for  pay- 
ment. 

Such  a  bond  belongs  to  an  issue  a  certain  amount  of  which 
(so  many  bonds)  is  drawn  for  redemption  at  stated  intervals. 


SMITH'S  FINANCIAL  DICTIONARY.  175 

A  drawiny"  takes  place  and  the  bonds  bearing'  the  numbers 
draw  n  arc  redeemed.  The  numbers  are  drawn  by  a  disinter- 
ested person  from  a  box,  basket  or  other  receptacle. 

Drive.  A  stock  market  term,  meaning  a  vigorous  attempt 
to  force  prices  down  ;  an  onslaught. 

Drummer.  A  colloquial  name  for  a  commercial  traveler  ; 
.an  agent  or  representative  of  a  mercantile  or  manufacturing 
concern  who  travels  and  solicits  orders. 

D.  R.  W.  These  letters  stand  for  Deutsche  reichs  waehr- 
ung;  that  is.  German  imperial  currency  (money). 

Dry  exchange.  Term  for  the  act  of  disguising  and  cover- 
ing usury  by  which  something  was  represented  as  having 
passed  on  both  sides  when  in  fact  nothing  passed  on  one  side. 

Ducats.  A  colloquialism  meaning  money.  For  instance,  to 
say  "I  have  the  ducats"  means  I  have  the  money. 

Due.     Owing  and  demandable. 

Due  bill.       A  written  acknowledgment  of  debt. 

Tn  some  cities  checks  are  not  certified  by  banks,  but  instead 
due  bills,  so-called,  are  employed.  When  guaranty  of  the 
payment  of  a  check  by  a  bank  is  desired  the  check  is  delivered 
to  the  bank  Which  retains  the  check  and  issues  in  place  of  it  a 
aue  bill  payable  by  the  bank  itself.  This  due  bill  may  be 
deposited  in  another  bank  and  collected  through  the  clearing 
house  the  same  as  a  check. 

A  due  bill  given  in  a  stock  transaction  foi  a  dividend  de- 
clared but  not  yet  payable  does  not  carry  interest — that  is, 
interest  on  it  cannot  be  collected  by  the  holder  of  the  due  bill 
from  the  maker  of  it. 

Dull.  This  word  when  applied  to  markets  has  a  different 
meaning  in  New  York  and  London.  In  New  York  it  merely 
means  quiet ;  in  London,  quiet  and  inclined  to  weakness. 

Dumb  bid.  Said  when  the  amount  which  the  owner  of 
property  offered  at  auction  is  willing  to  take  is  secretly  com- 
municated to  the  auctioneer  and  no  lower  bid  is  to  avail. 

Dummy  director.  One  who  has  been  elected  a  director  to 
serve  temporarily  (as  in  an  interim)  or  to  represent  some  one 
else  or  to  meet  legal  requirements. 

In  the  organization  of  a  new  corporation   (company)   it  is 


1^6  SMITH'S  FINANCIAL  DICTIONARY. 

often  the  case  that  the  board  of  directors  as  at  first  consti- 
tuted is  a  dummy  board  which  is  succeeded  by  a  real  board. 

Dummy  incorporator.  One  who  serves  in  place  of  a  real 
party  in  interest  to  meet  legal  requirements. 

In  the  organization  of  a  new  corporation  (company)  it  is 
often  the  case  that  the  incorporators  are  dummies  who  serve 
either  for  convenience  in  effecting  the  incorporation  or  for 
the  purpose  of  concealing  the  identity  of  the  real  parties  in 
mterest. 

Dummy  stockholder.  One  who  holds  (in  whose  name  is 
made  out  and  stands)  stock  which  in  fact  belongs  to  another. 

It  is  a  common  practise  for  large  owners  of  stocks  to  have 
their  stocks  made  out  in  the  names  of  clerks  and  brokers.  The 
purpose  is  to  conceal  the  actual  ownership. 

When  a  broker  buys  stock  for  a  speculator  the  certificate  is 
not  made  out  in  the  name  of  the  speculator.  A  certificate 
signed  (assigned)  in  blank  (see  Assigned  in  blank)  by  the 
original  owner  is  received  by  the  buying  broker  from  the  sell- 
ing broker  and  this  certificate  may  on  the  resale  of  the  stock 
be  delivered  to  the  new  buying  broker,  and  so  on,  the  same 
certificate  continuing  to  serve  indefinitely  in  transactions. 

Dun's.     The  name  of  one  of  the  commercial  agencies. 

Duplicate  check.  When  a  check  has  been  lost  or  stolen 
payment  of  it  is  stopped  (see  Stop  payment)  and  a  new  check 
is  issued,  usually  bearing  the  same  date  and  number.  Trans- 
versely (up  and  down)  across  the  face  of  it  is  written,  gener- 
ally in  red  ink,  the  word  "Duplicate." 

Dutch  standard.  A  standard  of  qualities  or  grades  of  sugar 
formerly  recognized  in  commercial  usage  and  in  tariff  legisla- 
tion. It  consisted  of  i6  samples,  representing  as  many  differ- 
ent grades  of  purity,  from  the  darkest  to  the  whitest,  put  up 
under  the  seal  of  the  Dutch  government — the  government  of 
the  Netherlands  (Holland). 

Duty.  An  impost,  particularly  a  tax  upon  goods  imported 
(and  in  some  countries  upon  goods  exported). 


SMITH'S  FINANCIAL  DICTIONARY.  177 


E 


E.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  east  or  eastern. 

Each  way.  When  a  commission  of  so  much  each  way  is 
charged  by  a  broker  in  stocks  or  commodities  (grain,  cotton, 
coffee,  etc.)  the  commission  for  buying  is  one  way  and  the 
commission  for  selling  is  the  other  way. 

Eagle.  The  name  given  to  the  $10  gold  coin  of  the  United 
States;  weight  258  grains;  thickness  .060  inch;  diameter  1.05 
inches.  The  name  is  (Ieri\ed  from  the  likeness  of  an  eagle 
stamped  upon  the  coin.  A  double-eagle  is  a  $20  piece,  a  half- 
eagle  is  a  $5  piece  and  a  quarter-eagle  is  a  $2.50  piece. 

E.  &  O.  E.  Errors  and  omissions  excepted ;  an  amplification 
of  E.  E.  Brokers  and  also  merchants  append  these  letters  to 
their  accounts  so  that  they  may  not  be  prevented  from  correct- 
ing errors  and  supplying  omissions  which  afterward  may  be 
discovered. 

Earnest  money.  Money  given  to  bind  a  bargain.  Arrha, 
the  Latin  designation,  is  occasionally  used. 

Earnings.     The  earnings  of  a  company  are  its  receipts. 

For  particular  information  as  to  the  earnings  of  a  railroad 
see  Railroad  earnings. 

Easier.     Said  when  rates,  prices  or  markets  are  lower. 

E.  E.     Errors  excepted.     See  E.  &  O.  E. 

Effective  circulation.  Money  in  the  Treasury  and  owned 
by  the  government  and  that  in  circulation  and  in  banks.  This 
is  available  money — that  is,  money  that  is  in  use  or  can  be  jiut 
in  use. 

Elastic  currency.  Elastic  currency  is  currency  the  volume 
of  which  would  be  regulated  automatically  by  the  demands  of 
business.  In  order  to  attain  that  end  it  would  be  necessary  to 
authorize  the  issue  of  circulating  notes  by  banks  under  such 
conditions  as  would  make  it  profitable  to  the  banks  to  increase 
the  volume  of  their  oustanding  notes  in  times  of  trade  activity 
and  large  demand  for  money  and  make  it  expensive  for  them 


178  SMITH'S  FINANCIAL  DICTIONARY. 

to  maintain  a  large  volume  of  outstanding  circulation  in  times 
of  business  depression  and  stagnation  in  the  money  markets. 

Various  propositions  to  provide  for  such  a  currency  have 
Ijeen  advanced,  all  based  on  the  theory  of  note  issues  secured, 
at  least  in  part,  by  the  general  assets  of  the  banks  instead  of  by 
a  deposit  of  bonds  and  regulated  by  a  graduated  tax  on  the 
amount  of  circulation  issued,  the  high  tax  being  expected  to 
discourage  excessive  issues,  except  at  times  when  the  need  for 
more  money  is  marked  and  imperative  and  when  its  absence 
would  result  in  stringency  and  abnormal  interest  rates,  thus 
discouraging  enterprise  and  restricting  business. 

There  was  a  plan  at  one  time  for  an  elastic  currency  based 
on  bonds.  It  was  proposed  that  the  government  should  issue 
bonds  wdiich  might  at  will  be  converted  by  the  holders  into 
currency  and  which  might  be  reissued  by  the  government  for 
currency.  The  bonds  were  to  bear  interest  only  while  out- 
standing. It  was  assumed  that  when  money  was  in  excessive 
supply  the  bonds  would  be  held  in  preference  to  currency, 
wdiile  on  the  other  hand,  when  the  supply  of  currency  was  in- 
adequate the  deficiency  could  readily  be  made  up  by  converting 
bonds  into  currency.  The  bonds  were  to  be  sold  by  the  gov- 
ernment for  gold  which  was  to  be  held  as  a  special  fund  so  that 
when  bonds  were  turned  back  to  the  government  the  currency 
exchanged  for  them  would  be  secured  by  the  gold  received  for 
the  bonds.  Two  objections  to  the  plan  were  raised  and  caused 
it  to  be  abandoned.  One  objection  was  that  the  proceeds  of 
the  bonds  would  not  be  available  for  the  general  purposes  of 
the  government.  The  other  objection  was  that  the  plan  made 
the  government  responsible  for  the  regulation  of  the  money 
market  and  imposed  an  additional  tax  on  the  people  to  the  ex- 
tent of  the  interest  paid  on  the  bonds. 

/\s  far  back  as  1869  a  plan  for  an  elastic  currency  was  laid 
before  Congress.  It  was  known  as  the  3.65-bond  plan.  It 
was  proposed  that  the  government  should  issue  bonds  bearing 
interest  at  3.65  per  cent  a  year,  both  principal  and  interest  pay- 
able in  greenbacks  (United  States  notes).  Holders  of  the 
bonds  were  to  l)e  ])c'nnitU'(l  to  exchange  the  bonds  for  green- 
backs at  anv  time  and  to  recci\  e  interest  at  the  rate  of  3.65  per 


SMITH'S  FINANCIAL  DICTIONARY.  179 


cent  (i  cent  a  day  on  each  $100)  while  they  had  been  outstand- 
ing. Likewise,  holders  of  greenbacks  were  to  be  permitted  to 
exchange  greenbacks  for  the  3.65  bonds  at  any  time.  The 
scheme  was  pronounced  ingenious  but  unstable  and  nothing 
came  of  it. 

Also  see  Asset  currency;  also  see  Emergency  currency. 

Embezzlement.  Fraudulent  appropriation  of  money  or 
property  held  in  trust ;  a  deficiency  caused  by  a  breach  of  trust. 

Emergency  currency.  The  name  applied  to  currency  in- 
tended for  temporary  use  in  times  of  acute  money  stringency 
or  financial  panic.  Many  plans  have  been  ofifered  to  provide 
for  such  an  issue.  The  object  has  been  attained  indirectly  in 
times  past  by  the  voluntary  action  of  clearing  house  associa- 
tions in  many  cities. 

For  example,  in  1893  the  clearing  houses  in  New  York,  Bos- 
ton and  Philadelphia  issued  in  the  aggregate  $63,900,000  in 
clearins:  house  loan  certificates.  These  certificates  were  used 
m  the  settlement  of  balances  between  the  member  banks  and 
an  equal  amount  of  money  was  released  to  supply  the  void 
made  in  the  circulating  medium  by  the  heavy  gold  exports  and 
the  withdrawal  of  money  from  the  banks  for  hoarding  and  for 
current  hand-to-hand  use.  In  some  Southern  cities  the 
clearing  houses  issued  loan  certificates  in  as  small  :i mounts 
as  25  cents  for  popular  circulation,  so  urgent  was  the  demand 
for  currency.  The  question  of  the  legality  of  this  latter  ac- 
tion was  not  raised  at  the  time  because  the  crisis  was  so  acute 
that  wisdom  seemed  to  forbid  any  questionings  that  might 
make  it  worse. 

It  is  urged,  however,  by  the  advocates  of  an  authorized 
method  of  emitting  an  emergency  currency  that  definite  legal 
means  should  be  devised  for  similar  situations  in  the  future. 
Some  advocate  the  organization  of  state  clearing  associations 
empowered  to  act  under  the  combined  credit  of  all  the  mem- 
ber banks ;  others  would  give  to  individual  banks,  acting  under 
the  approval  of  the  Comptroller  of  the  Currency,  the  right  to 
emit  temporary  notes ;  while  still  others  urge  the  organization 
of  a  great  central  bank,  in  which  the  other  banks  shall  be 
stockholders,  which  shall  have  the  power  to  provide  a  tempo- 
rary note  issue  for  such  emergencies. 


i8o  SMITH'S  FINANCIAL  DICTIONARY. 

Also  see  Asset  currency;  also  see, Elastic  currency. 

Emission,  Issuing  or  putting  forth,  as  emission  of  bonds. 
An  emission  is  the  thing  (or  things)  issued  or  put  forth,  as 
an  emission  of  bonds  or  an  emission  of  bank  notes. 

Encash.  To  pay  in  money ;  for  instance,  to  encash  a  check, 
draft  or  note  is  to  pay  it  in  cash. 

Endless  chain.  Name  given  to  the  process  by  which  gold  is 
taken  from  the  Treasury  by  the  presentation  of  United  States 
notes  (greenbacks),  which,  not  being  cancelled  and  retired,  are 
reissued  and  become  again  available  for  the  same  purpose. 

Since  the  resumption  of  "specie  payments  in  1879  nearly 
twice  the  amount  of  United  States  notes  in  existence  has  been 
redeemed  in  gold  without  extinguishing  any  of  the  debt  they 
represent.  The  process  is  employed  when  gold  is  wanted  for 
export  or  for  hoarding  in  times  of  panic. 

During  the  years  1894,  1895  and  1896  commercial  depression 
and  fear  that  the  monetary  system  of  the  country  would  be 
overturned  by  the  success  of  the  agitation  for  free  silver  coin- 
age caused  such  enormous  withdrawals  of  gold  from  the 
Treasury  that  four  separate  issues  of  bonds,  amounting  in  all 
to  $265,000,000,  were  found  necessary  to  maintain  the  gold 
reserve  and  prevent  the  suspension  of  payments  on  United 
States  notes  and  Treasury  notes.  The  Treasury  notes  are 
gradually  being  retired,  but  the  United  States  notes,  of  which 
there  are,  in  round  numbers,  $346,000,000,  can  only  be  retired 
by  an  act  of  Congress.  So  long  as  they  are  in  existence  they 
can  still  be  used  over  and  over  for  the  withdrawal  of  gold  from 
the  Treasury. 

Endorse.  See  Indorse,  which  is  the  spelling  preferably  used 
in  business  and  in  law. 

Enface.  To  write  or  print  on  the  face,  as  to  certify  a  check 
or  accept  a  bill  of  exchange  (draft). 

Enfaced  paper.  A  term  applied  to  the  promissory  notes 
issued  by  the  Government  of  India  (known  as  rupee  pnper) 
when  they  bear  on  their  face  notification  that  interest  on  them 
can  be  collected  by  presenting  the  notes  at  the  Bank  of  Eng- 
land in  London.  The  interest  is  paid  in  drafts  payable  in 
India.  These  drafts  are  readily  bought  by  parties  having  re- 
mittances to  make  to  India. 


SMITH'S  FINANCIAL  DICTIONARY.  i8i 

Enforced  covering.  Compulsory  buying  to  cover  (close) 
short  contracts  in  stocks  or  bonds  or  in  grain,  cotton,  etc. 

Engagement.  Commitment ;  an  obligation  assumed  ;  a  con- 
tract entered  into;  a  promise. 

As  a  commercial  term  engagement  means  the  securing  of 
freight  room  in  a  vessel. 

Engrossing  the  market.  Buying  stocks  or  commodities  in 
large  quantity  in  order  to  have  command  of  the  market. 

Entrepot.  A  distributing  commercial  centre,  whether  a  sea- 
port or  inland  town,  especially  a  port  where  goods  are  stored 
until  re-exported  or  until  duties  are  paid  ;  a  depot  or  store- 
house. 

Equipment.  The  equipment  of  a  railroad,  as  the  term  is 
commonly  used,  means  its  cars  and  locomotives. 

Equipment  bond.  A  bond  in  an  issue  created  by  a  railroad 
to  acquire  rolling  stock  and  secured  by  a  mortgage  thereon. 

Equity.  The  equity  in  property  is  the  diflference  between 
the  value  of  property  mortgaged  or  otherwise  encumbered 
and  the  amount  of  the  obligation  (debt)  to  secure  which  the 
property  is  pledged. 

Thus,  the  equity  in  a  loan  is  the  diflference  between  what  the 
securities  pledged  as  collateral  are  worth  and  the  amount  bor- 
rowed on  them.  As  a  rule  securities  are  accepted  as  collateral 
by  lenders  of  money  at  about  80  per  cent  of  their  market  value 
— that  is,  a  lender  will  lend  $80,000  on  securities  of  the  market 
value  of  $100,000  or  will  lend  $100,000  on  securities  of  the 
market  value  of  $125,000. 

Equivalent.  This  word  when  applied  to  the  price  of  a 
stock  means  a  price  that  is  equal  to  the  price  for  the  sam-^ 
stock  when  it  is  quoted  on  a  diflferent  basis. 

The  price  in  London  of  an  American  stock  is  equivalent  to 
the  price  in  New  York  when  the  stock  is  selling  in  London  at 
a  price  which,  after  allowing  for  the  diflference  in  the  method 
of  quoting,  is  equal  to  the  price  at  which  the  stock  is  selling  in 
New  York. 

In  dealings  in  American  stocks  on  the  London  Stock  Ex- 
change 4  shillings  is  counted  $1.  Four  shillings  being  equal 
to  97  1-3  cents  the  price  of  an  American  stock  must  be  2  2-3 
per  cent  (quotably  2  5-8  per  cent)  higher  in  London  than  in 


i82  SMITH'S  FINANCIAL  DICTIONARY. 


New  York  if  the  London  price  is  to  be  equivalent  to  (or  at  a 
parity  with)  the  New  York  price.  Not  2  5-8  per  cent  of  the 
face  value  is  to  be  added  arbitrarily  to  the  New  York  price,  but 
2  5-8  per  cent  of  the  New  York  price,  whatever  it  may  be,  is  to 
be  added  to  the  New  York  price  to  make  an  equivalent  London 
price. 

Thus,  for  a  stock  selling  at  50  in  New  York  the  equivalent 
price  in  London  would  be  51  3-8  (while  the  fraction  3-8  is  not 
strictly  correct  it  is  quotably  correct);  For  a  stock  selling  at 
100  in  New  York  the  equivalent  price  in  London  would  be 
102  5-8.  Conversely,  for  a  stock  selling  at  100  in  London  the 
equivalent  price  in  New  York  would  be  97  3-8  and  for  a  stock 
selling  at  50  in  London  the  equivalent  price  in  New  York 
would  be  48  5-8. 

In  grain  there  is  a  normal  difference  in  price  between  two 
markets  equal  to  the  cost  of  transporting  the  grain  from  the 
market  where  the  lower  price  prevails  to  the  market  where 
the  higher  price  prevails.  When  the  difference  is  normal 
equivalent  prices  prevail.     It  is  the  same  in  cotton,  etc. 

Estimated  car  lots.  A  grain  trade  term,  meaning  lots  (num- 
ber of  cars)  expected  at  Chicago  and  other  primary  grain 
markets  on  the  day  following  the  estimate. 

Even.  When  a  broker  has  bought  and  sold  the  same 
amount  of  the  same  stock  he  is  even  and  has  not  to  re- 
ceive or  deliver  that  particular  stock  if  it  is  on  the  list  of  stocks 
cleared  at  the  New  York  Stock  Exchange  clearing  house.  If 
his  transactions  are  not  in  stocks  on  the  clearing  house  list, 
then  he  has  to  receive  and  deliver  the  stocks.  If,  however,  he 
has  bought  from  and  sold  to  the  same  broker  the  same  stock  he 
can  pair  off — neither  receive  nor  deliver,  but  simply  settle  dif- 
ferences. 

On  the  London  Stock  Exchange  the  continuation  rate  on  a 
security  is  even  when  no  charge — backwardation  or  contango — 
is  made  for  continuing  bargains  until  the  next  settlement.  See 
At  even. 

Evening  up.  A  stock  market  term,  meaning  the  securing  of 
profit  to  oft'sel  a  previous  loss.  Thus,  a  speculator  who  sus- 
tained a  loss  in  a  stock  of  which  he  was  short  may  turn  about 
and  go  long  of  the  stock  and  make  up  his  loss;  or  a  speculator 


SMITH'S  FINANCIAL  DICTIONARY.  183 

who  lost  in  one  stock  may  make  up  his  loss  in  another  stock. 

Also,  in  abitrage  operations  in  stocks  (see  Arbitrage) 
when  a  dealer  buys  more  than  he  sells  he  subsequently  sells 
enough  additional  to  make  up  the  difference,  thus  equalizing 
or  evening  up. 

Even  lots.     In  stocks  lots  in  multiples  of  100  shares. 

Ex.  Without  or  not  including,  as  ex-dividend  or  ex-inter- 
cst. 

Ex-all.  London  Stock  Exchange  term,  signifying  that  a 
stock  is  selling  ex-dividend  and  rights  or  ex  any  two  or  more 
privileges  simultaneously  offered  to  the  shareholders  (stock- 
holders) of  a  company,  such  as  the  right  to  subscribe  for  new 
stock  of  the  company  or  for  new  stock  of  a  controlled  com- 
pany or  for  new  stock  of  two  or  more  controlled  companies. 
When  a  stock  is  sold  "ex"  it  means  that  the  buyer  has  no  claim 
upon  the  dividend  or  rights  or  bonus,  or  any  other  advantage 
recently  declared  or  due.     Ex  is  the  opposite  of  cum. 

Exchange.  The  payment  of  an  obligation  in  one  place  by 
the  transfer  of  a  credit  from  another  place.  By  this  operation 
the  obligation  is  discharged  without  the  direct  forwarding  of 
money. 

Exchange,  in  itself,  is  an  order  obtained  in  one  place  for  the 
payment  of  money  in  another  place.  Exchange  is  divided  into 
domestic  exchange  and  foreign  exchange,  but  the  same  prin- 
ciples obtain  in  both. 

In  the  United  States  the  term  exchange  (whether  referring 
to  foreign  exchange  or  domestic  exchange,  but  specifically  in 
referring  to  foreign  exchange)  is  used,  whereas  in  Great  Brit- 
ian  the  custom  is  to  use  the  term  in  the  plural,  viz :  the  ex- 
changes. The  term  is,  of  course,  derived  from  the  exchanges 
of  moneys  and  credits.  It  is  the  common  practise  in  the  United 
States  to  say  exchange  when  bills  of  exchange  are  meant ;  and 
likewise  the  term  exchange  is  generally  construed  as  meaning 
foreign  exchange. 

There  is  practically  no  difference  between  a  bill  of  exchange 
and  a  draft.  The  term  bill  of  exchange,  however,  is  commonly 
applied  to  an  order  for  money  payable  in  a  foreign  country, 
whereas  the  term  draft  is  applied  to  an  .order  payable  within 
the   country   of  its   origin. 


i84  SMITH'S  FINANCIAL  DICTIONARY. 

For  additional  information  see  Domestic  exchange;  also  see 
Foreign  exchange. 

The  term  exchange  also  means  a  place  where  purchases  and 
sales  are  made,  as  stock  exchange. 

Exchange  broker.  One  who  acts  for  others  in  selling  and 
buying,  more  particularly  selling,  exchange.  The  usual  com- 
mission charged  by  a  broker  is  i-8  per  cent  for  selling  domestic 
exchange  and  $i  per  £i,ooo  (roundly  $5,000)  for  selling  for- 
eign exchange. 

Exchange  loan.     See  Foreign  exchange  loan. 

There  is  practically  no  such  thing  as  a  loan  of  domestic  ex- 
change. When  a  loan  is  obtained  from  a  bank  it  ordinarily  de- 
livers to  the  borrower  a  check  on  itself  made  out  by  its  cashier 
(it  is  called  a  cashier's  check)  which  the  borrower  may  use  in 
the  place  where  issued  or  may  transmit  to  any  other  place. 
The  bank  will,  if  desired,  furnish  to  the  borrower  a  draft 
on  a  bank  in  some  other  place,  but  this  draft  lacks  many 
of  the  characteristics  of  a  bill  of  exchange.  The  borrower 
merely  borrows  (obtains  a  loan)  and  it  is  a  matter  of  ar- 
rangement with  the  bank  as  to  the  form  in  which  he  shall  re- 
ceive the  amount  which  he  borrows. 

Exchange  operation.  A  transaction  in  domestic  or  foreign 
exchange. 

The  term  exchange  operation  is  also  a  London  Stock  Ex- 
change designation  for  a  hedge  on  an  option  or  privilege,  as 
selling  a  call  against  a  put  bought  or  buying  a  put  against  a 
call  sold.    The  purpose  is  protection  against  loss. 

Exchange  quotations.  Same  as  exchange  rates ;  see  Ex- 
change rates. 

Exchange  rates.  The  basis  of  all  exchange  rates  is  the  rate 
for  sight  exchange  (that  is,  a  bill  or  draft  which  is  payable  at 
sight,  which  means  on  demand  or  presentation). 

The  rate  for  a  time  bill  or  long  bill  (one  payable  at  a  spec- 
ified future  date)  is  the  rate  for  a  sight  bill,  less  interest  on 
the  amount  of  the  bill  from  the  date  of  its  issuance  to  the  date 
of  its  payment.  This  allowance  for  interest  is  made  because 
the  seller  of  the  bill  has  the  use  of  the  money  paid  by  the  buyer 
for  it  until  its  payment.  Interest  is  figured  at  the  rate  prevail- 
ing where  the  bill  is  payable  for  the  reason  that  the  bill   is 


SMITH'S  FINANCIAL  DICTIONARY.  185 

domiciled  or  domiciliated  there,  which  is  another  way  of  say- 
mg-  tliat  the  place  of  its  payment  is  the  place  of  its  legal  ex- 
istence, or  rather  will  be  after  its  acceptance,  and  the  presump- 
tion is  that  it  will  be  promptly  accepted  by  the  one  upon  whom 
it  is  drawn  on  its  presentation  to  him. 

Rates  for  domestic  exchange  issued  in  New  York  are  not 
published.  To  ascertain  the  rates  it  is  necessary  to  make  in- 
quiry of  banks;  the  business  is  almost  entirely  in  the  hands  of 
banks.  At  other  points  the  rates  on  New  York  and  also  on 
.a  few  important  points  like  Boston,  Chicago,  San  Francisco, 
Philadelphia  and  St.  Louis  are  published.  A\'hen  quoted  in 
•cents  (or  dollars)  it  is  meant  that  the  rate  is  so  much  premium 
■or  discount,  as  may  be  specified,  on  each  $1,000.  In  some  in- 
stances the  rate  is  in  percentages — so  much  per  cent  premium 
or  discount. 

For  information  as  to  rates  for  foreign  exchange  see  Foreign 
exchange  rates. 

Exchanges.  The  exchanges  at  a  clearing  house  are  the  items 
(checks,  drafts,  etc.,)  which  are  presented  by  creditor  banks 
(banks  which  hold  them  for  collection)  and  are  received  by 
debtor  banks  (banks  which  are  to  pay  them).  In  the  opera- 
tion of  making  exchanges  each,  bank  presents  the  items  which 
it  holds  against  all  other  banks  and  receives  in  return  the  items 
which  all  other  banks  hold  against  it. 

For  additional  information  see  Clearing  house  of  the  associ- 
ated banks  of  New  York, 

Exchanges,  The.  In  the  United  States  the  term  exchange 
(whether  referring  to  foreign  exchange  or  domestic  exchange, 
but  specifiically  in  referring  to  foreign  exchange)  is  used, 
whereas  the  practise  in  Great  Britain  is  to  use  the  term  in  the 
plural,  viz :  the  exchanges.  The  term  is,  of  course,  derived 
from  exchanges  of  moneys  and  credits.  It  is  the  common  prac- 
tise in  the  United  States  to  say  exchange  when  bills  of  ex- 
change are  meant;  and  likewise  the  term  exchange  is  generally 
construed  as  meaning  foreign  exchange. 

Exchequer.  The  treasury  of  a  state ;  also,  colloquially,  the 
finances  or  pecuniary  resources  of  a  person,  firm  or  corpor- 
.ation. 

Exchequer  bill.     An  interest  bearing  promissory  note  for- 


i86  SMITH'S  FINANCIAL  DICTIONARY. 

merely  issued  by  authority  of  the  British  Parliament.  It  could 
be  used  in  payment  of  taxes  at  its  face  value.  No  ex- 
chequer bills  are  now  in  existence. 

Exchequer  bond.  A  security  issued  by  the  British  govern- 
ment representing  a  part  of  the  unfunded  debt ;  it  is  of  a  more 
permanent  character  than  a  Treasury  bill  inasmuch  as  it  runs 
for  a  longer  period.  Principal  and  interest  are  paid  out  of  the 
consolidated  fund. 

Ex-coupon.  A  bond  is  sold  ex-coupon  when  the  coupon  for 
the  current  interest  payment  is  detached. 

Ex-dividend.  Without  or  not  including  dividend.  On  and 
after  the  day  the  transfer  books  of  a  corporation  close  for  the 
payment  of  a  dividend  the  stock  sells  ex-dividend ;  that  is,  the 
stock  does  not  carry  with  it  to  the  buyer  the  dividend  that  has 
been  declared  on  it. 

Ex-drawing.  English  term ;  a  bond  sold  ex-drawing  does  not 
include  to  the  buyer  any  advantage  that  the  bond  may  derive 
if  drawn  for  redemption. 

Executive  committee.  The  executive  committee  of  a  board 
of  directors  has  power  to  act  in  all  matters  except  such  as  are 
(by  the  company's  charter,  articles  of  incorporation  or  by-laws 
or  by  the  statutes)  restricted  to  the  board  of  directors  as  a 
whole. 

Ex-elevator.  \  grain  trade  term,  meaning  out  of  elevator; 
similar  to  ex-store  ;  see  Ex-store. 

Exemplary  damages.  Same  as  punitive  damages ;  an  amount 
allowed  as  punishment  for  a  malicious  or  aggravated  injury. 

Exhaust  price.  The  point  at  which  the  margin  in  a  specula- 
tive transaction  is  exhausted  and  at  which  the  broker  will  close 
the  transaction  if  the  margin  is  not  replenished. 

Ex-interest.     Without  interest  or  not  including  interest. 

Registered  bonds  sell  ex-interest  the  same  as  stocks  sell  ex- 
dividend  when  the  books  are  closed  (see  Books  closed).  If 
a  registered  bond,  say  a  4  per  cent  bond  with  the  interest  pay- 
able semi-annually,  is  selling  at  98  while  a  coupon  bond  of  the 
same  issue  is  selling  at  100  it  is  because  interest  goes  with 
the  coupon  bond  while  it  does  not  go  with  the  registered  bond. 

Ex-lake.     A  term  applied  to  grain  or  any  freight  that  has 


SMITH'S  FINANCIAL  DICTIONARY.  187 


been  transported  part  of  the  way  by  lake  and  the  remainder  of 
the  distance  by  canal  or  railroad. 

Ex-new.  London  Stock  Exchange  term,  signifying  that  a 
stock  is  selling  without  the  right  to  participate  in  an  allotment 
of  new  stock. 

Export  bar.  A  name  given  to  a  bar  or  ingot  of  fine  (pure) 
gold  containing  $8,000  worth  of  the  metal.  The  name  is  de- 
rived from  the  fact  that  bars  of  this  size  are  customarily  used 
in  export  shipments  of  gold  when  the  shipments  are  in  bars 
instead  of  coin. 

Also  see  Jeweler's  bar. 

Exporter's  credit.  Exporter's  credit  is  given  when  an  ex- 
porter is  allowed  to  draw  on  a  dealer  in  foreign  exchange  in 
advance  of  an  actual  shipment  abroad  by  him;  when  he  makes 
his  shipment  he  discharges  his  obligation  by  delivering  the 
draft  drawn  against  the  consignee  of  the  property  shipped,  to- 
gether with  the  bill  of  lading,  to  the  dealer  in  exchange  to 
whom  he  is  indebted. 

Exporting  countries.  Grain  producing  countries  which  grow 
more  grain  than  they  consume  and  sell  the  surplus  to  foreign 
countries.  Argentina,  Australia,  Hungary,  India,  Roumania, 
Russia  and  the  United  States  are  the  leading  exporting  coun- 
tries. 

Exports.  Goods  or  any  articles  of  trade  or  commerce  sent 
out  of  a  country  to  another  country. 

Export  trade.  Goods  or  any  articles  of  commerce  sold  and 
shipped  to  other  countries ;  another  name  is  outward  trade. 

Express  company  money  order,  A  bill  of  exchange  (draft) 
sold  by  an  express  company.  It  is  forwarded  by  mail  to  the 
payee  (the  one  to  whom  the  amount  of  it  is  to  be  paid)  the 
same  as  a  bill  sold  by  a  bank  or  banker. 

Express  contract.  One  in  which  the  terms  and  stipulations 
of  the  agreement  are  specifically  set  forth. 

Express  damages.     A  legal  term ;  actual  or  real  damages. 

Ex-rights.  A  stock  that  is  sold  ex-rights  does  not  convey  to 
the  buyer  the  privilege  to  participate  in  any  right  (as  the  right 
to  subscribe  for  new  stock  or  for  new  stock  of  a  subsidiary 
concern)  that  may  recently  have  been  granted  to  holders. 

Ex-ship  or  ex-steamer.     A  mercantile  term ;  goods  sold  ex- 


i88  SMITH'S  FINANCIAL  DICTIONARY. 

ship  or  ex-steamer  are  sold  free  out  of  the  vessel  (free  of 
charges  up  to  the  time  of  discharge  from  the  vessel).  The 
seller's  responsibility  ceases  as  soon  as  the  goods  have  left  the 
vessel.     Free  overside  has  the  same  meaning. 

Sometimes  the  term  ex  is  used  in  connection  with  the  name 
of  a  vessel,  as  ex-steamer  Ocean  or  ex-ship  Wave.  In  such 
a  case  the  name  of  the  vessel  is  used  for  the  purpose  of  desig- 
nating the  particular  vessel  by  which  the  goods  arrived  as 
well  as  to  indicate  that  the  goods  are  free  out  of  the  vessel. 

Ex-store.  A  commercial  term,  meaning  out  of  store.  In  a 
transaction  ex-store  the  buyer  (of  grain,  for  instance)  must 
pay  cartage,  lighterage  or  other  charges  after  leaving  the 
storage  warehouse  or  elevator. 

EXT.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  extended  or  extension,  as  bonds  extended  beyond 
the  date  of  their  maturity  or  bonds  issued  under  a  mortgage  on 
an  extension  of  a  railroad. 

Extended.  When  an  obligation  has  been  continued  beyond 
the  time  originally  set  for  the  payment  of  it  the  obligation  is 
said  to  have  been  extended. 

Extended  bond.  A  bond  extended  after  maturity  for  a  fixed 
period  at  the  same  or  perhaps  at  a  different  rate  of  interest. 

Extension.  When  an  obligation  has  been  continued  beyond 
the  time  originally  set  for  the  payment  of  it  an  extension  is 
said  to  have  been  granted. 

Extension  bond.  A  bond  issued  under  a  mortgage  covering 
an  extension  of  a  railroad ;  it  may  or  may  not  represent  a  first 
lien. 

External  commerce  or  trade.  Same  as  foreign  commerce 
or  trade ;  the  exports  and  imports  of  a  country,  that  is,  its 
commerce  or  trade  (purchases  and  sales)  with  other  countries. 

Extra  dividend.  A  dividend  in  addition  to  the  regular  divi- 
dend. 

Extraordinary  meeting.  English  term  for  a  rheeting  of  the 
shareholders  (stockholders)  of  a  company  to  act  on  some  un- 
usual proposition,  such  as  an  increase  of  capital  or  reconstruc- 
tion  (reorganization). 

Ex-warehouse.  English  term,  meaning  the  same  as  ex- 
store  ;  see  Ex-store. 


SMITH'S  FINANCIAL  DICTIONARY.  189 


Face  value.  The  face  value  of  stocks  and  bonds  is  the  value 
printed  on  the  face  of  them — the  amount  they  are  issued  for 
or  call  for;  same  as  par  value.  For  additional  information  see 
Par. 

Factor.    An  agent  employed  to  sell  goods  consigned  to  him. 

The  difiference  between  a  factor  and  a  broker  is  that  the  fac- 
tor is  entrusted  with  the  property  which  he  is  to  dispose  of 
while  the  broker,  in  a  strict  sense,  is  only  employed  to  make  a 
bargain  for  the  sale  of  property.  The  term  factor  is  most  com- 
monly used  in  the  cotton  trade. 

The  word  factor  is  often  used  in  the  sense  of  influence,  force 
or  element,  as  a  factor  in  the  situation  or  in  the  money  market 
or  stock  market. 

Failure.  Admission  of  inability  to  meet  obligations ;  assign- 
ment in  bankruptcy. 

Falling  averages.  The  weekly  statement  of  the  associated 
banks  of  New  York  gives  the  average  deposits,  loans,  cash 
holdings,  etc.,  of  the  banks  for  the  week.  When  these  items 
are  declining  in  amount  the  bank  statement  is  said  to  be  made 
up  on  falling  averages.  The  opposite  of  falling  averages  is 
rising  averages.  For  additional  information  see  Bank  state- 
ment. 

Falling  exchange.  If  foreign  exchange  is  quoted  in  the 
money  of  the  country  where  issued  a  falling  rate  for  it  signifies 
that  the  exchange  situation  is  in  favor  of  the  country  where 
the  exchange  is  issued  and  against  the  country  where  it 
is  payable.  In  other  words,  the  exchange  is  less  costly — the 
money  of  the  country  where  the  exchange  is  payable  costs  less 
in  the  money  of  the  country  where  the  exchange  is  issued.  For 
instance,  exchange  on  London  is  quoted  in  New  York  in 
dollars  (and  cents)  and  when  the  rate  is  falling  the  pound 
sterling  is  worth  less  in  dollars  (and  cents). 

If  foreign  exchange  is  quoted  in  the  money  of  the  country 
where  it  is  payable  a  falling  rate  for  it  signifies  that  the  ex- 


jgo  SMITH'S  FINANCIAL  DICTIONARY. 


change  situation  is  against  the  country  where  the  exchange  is 
issued  and  in  favor  of  the  country  where  it  is  payable.  In  other 
words,  exchange  is  more  costly — the  money  of  the  country 
where  the  exchange  is  issued  brings  less  in  the  money  of  the 
country  where  the  exchange  is  payable.  For  instance,  ex- 
change on  Paris  is  quoted  in  New  York  in  francs  and  when  the 
rate  is  falling  less  in  francs  (and  centimes)  can  be  obtained 
for  the  dollar. 

The  opposite  of  falling  exchange  is  rising  exchange ;  see 
E-ising  exchange. 

False  certification.  The  term  commonly  used  is  overcertifi- 
cation  ;  see  Overcertification. 

Fancy  stock.  A  stock  high  in  price;  also  one  subject  to 
extensive  manipulation  with  wide  changes  in  price. 

F.  A.  S.     Free  alongside  ship ;  see  Free  alongside  ship. 

Fat  loan.  A  colloquialism,  meaning  a  loan  for  which  an 
imusual  amount  of  collateral  is  provided. 

Favorable  and  unfavorable  (foreign)  exchange  conditions. 
If  foreign  exchange  is  quoted  in  the  money  of  the  country 
where  issued  a  falling  rate  for  it  signifies  that  the  exchange 
situation  is  favorable  to  (in  favor  of)  the  country  where  the 
exchange  is  issued  and  unfavorable  to  (against)  the  country 
where  it  is  payable.  In  other  words,  the  exchange  is  less 
costly — the  money  of  the  country  where  the  exchange  is  pay- 
able costs  less  in  the  money  of  the  country  where  the  exchange 
is  issued.  For  instance,  exchange  on  London  is  quoted  in  New 
York  in  dollars  (and  cents)  and  when  the  rate  is  falling  the 
pound  sterling  is  worth  less  in  dollars  (and  cents). 

If  foreign  exchange  is  quoted  in  the  money  of  the  country 
where  it  is  payable  a  falling  rate  for  it  signifies  that  the  ex- 
change situation  is  unfavorable  to  (again.st)  the  country  where 
the  exchange  is  issued  and  favorable  to  (in  favor  of)  the 
country  where  it  is  payable.  In  other  words,  exchange  is  more 
costly — the  money  of  the  country  where  the  exchange  is  is- 
sued brings  less  in  the  money  of  the  country  where  the  ex- 
change is  payable.  For  instance,  exchange  on  Paris  is  quoted 
in  New  York  in  francs  and  when  the  rate  is  falling  less  in 
francs  (and  centimes)  can  be  obtained  for  the  dollar. 

If  foreign  exchange  is  c]uotcd  in  the  money  of  the  country 


SMITH'S  FINANCIAL  DICTIONARY.  191 

where  issued  a  rising  rate  for  it  signifies  that  the  exchange 
situation  is  unfavorable  to  (against)  the  country  where  the 
exchange  is  issued  and  favorable  to  (in  favor  of)  the  country 
where  it  is  payable.  In  other  words,  exchange  is  more  costly 
— the  money  of  the  country  where  the  exchange  is  payable 
costs  more  in  the  money  of  the  country  where  the  exchange  is 
issued.  For  instance,  exchange  on  London  is  quoted  in  New 
York  in  dollars  (and  cents)  and  when  the  rate  is  rising  the 
pound  sterling  costs  more  in  dollars   (and  cents). 

If  foreign  exchange  is  quoted  in  the  money  of  the  country 
where  it  is  payable  a  rising  rate  for  it  signifies  that  the  ex- 
change situation  is  favorable  to  (in  favor  of)  the  country 
where  the  exchange  is  issued  and  unfavorable  to  (against)  the 
country  where  it  is  payable.  In  other  words,  exchange  is  less 
costly — more  in  the  money  of  the  country  where  the  exchange 
is  payable  is  obtainable  in  the  money  of  the  country  where  the 
exchange  is  issued.  For  instance,  exchange  on  Paris  is  quoted 
in  New  York  in  francs  and  when  the  rate  is  rising  more  in 
francs  (and  centimes)   can  be  obtained  for  the  dollar. 

FD.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  funding,  as  funding  (or  refunding)  bonds. 

Feeder.  A  name  applied  to  a  railroad  (or  other  carrying 
line)  from  which  another  and  usually  more  important  railroad 
(or  other  carrying  line)  receives  traffic  (freight  or  passengers 
or  both).  Sometimes  the  name  feeder  is  given  to  a  branch 
line  which  was  built  or  acquired  to  obtain  additional  traffic 
for  the  main  line. 

Fiat  money.  Fiat  money  is  paper  money  issued  by  a  gov- 
ernment against  which  neither  gold  nor  silver  is  held  in  the 
treasur3\  It  is  money  by  fiat  (decree)  of  the  government. 
United  States  notes  (greenbacks)  were  fiat  money,  but  they 
are  now  redeemed  in  gold  by  the  Treasury. 

Finance.  The  science  of  money  and  monetary  affairs ;  the 
systematic  control  and  regulation  of  revenue  and  expenditure ; 
j)ecuniary  management  or  methods. 

The  term  finance  comprehends  legislation  (that  is,  financial 
and  allied  legislation),  banking,  securities,  negotiation,  promo- 
tion,  organization,   reorganization,   adjustment   and   readjust- 


79-^  SMITH'S  FINANCIAL  DICTIONARY. 

ment.     Finance  involves  and  implies  science  and  skill  in  one 
or  several  or  all  of  these  things. 

Finance  bill.  A  bill  of  exchange  (draft)  drawn  in  connection 
with  a  financial  operation,  as  an  issue  of  stock  or  bonds ;  or  a 
reorganization  or  readjustment;  or  an  underwriting. 

The  term  is  often  applied  to  a  bill  issued  as  a  loan.  For  ex- 
ample, a  person  in  New  York  borrows  £50,000  in  sterling  in 
London.  The  lender  in  London  sends  to  the  borrower  in  New 
York  a  letter  formally  authorizing  the  borrower  to  draw  on  the 
lender  for  the  amount  named.  The  stipulation  is  (usually) 
made  that  collateral  for  the  loan  (usually  stocks  or  bonds) 
shall  be  attached  to  (shall  accompany)  the  draft.  The  stipu- 
lation may  be  that  the  collateral  shall  be  deposited  in  trust  in 
New  York,  in  which  case  only  a  memorandum  of  the  collateral 
is  attached  to  the  bill.  By  leaving  the  collateral  in  New 
York  substitution  or  change  in  the  collateral  can  be  more 
readily  made  than  if  the  collateral  is  sent  to  London.  Substi- 
tution can,  of  course,  only  be  made  by  consent  of  the  lender  in 
London.  The  loan  might  be  obtained  in  Paris,  in  which  case 
it  would  be  in  francs ;  or  it  might  be  obtained  in  Berlin,  in 
which  case  it  would  be  in  reichsmarks  (marks).  The  bill  of 
exchange  is  sold  bv  the  borrower  the  same  as  anv  other  bill 
of  exchange  to  obtain  the  money  represented  by  it. 

Finance  committee.  The  finance  committee  of  a  stock  com- 
pan)'  is  the  committee  of  the  board  of  directors  which  espe- 
cially has  the  handling  and  direction  of  its  monetary  afifairs. 

Finance  company.  In  Great  Britain  a  finance  company  is 
one  whose  main  business  is  investing  and  dealing  in  the  stocks 
and  bonds  of  other  companies. 

Financed.  Placed  in  satisfactory  financial  or  monetar}-  cir- 
cumstances. 

An  enterprise  or  a  business  has  been  financed  when  its  finan- 
cial requirements  have  been  met.  Specifically,  a  stock  com- 
pany has  been  financed  when  placed  in  a  satisfactory  financial 
condition,  as  when  its  stock  or  its  stock  and  bonds  have  been 
sold  or  underwritten  and  it  has  been  supplied  with  working 
capital. 

In  financial  usage  preference  is  given  to  the  word  financed 
over  the  word  financiered. 


SMITH'S  FINANCIAL  DICTIONARY.  193 

Financial.  Of  or  pertaining  to  finance  or  revenue;  mone- 
tary. 

Financial  article.  The  article  in  a  newspaper  which  de- 
scribes operations  and  conditions  in  the  financial  markets,  in- 
cluding the  market  for  stocks  and  bonds ;  another  name  is 
money  article. 

It  is  the  custom  of  newspapers  to  print  the  report  of  the 
transactions  in  stocks  on  the  New  York  Stock  Exchange  in 
tabular  form.  First  is  given  the  number  of  shares  of  each 
stock  sold  and  then  in  order  the  high,  low  and  last  prices  and 
then  the  net  change,  which  is  represented  by  the  difference  be- 
tween the  last  price  of  the  day  in  question  and  the  last  price  the 
day  before  (or  if  there  was  no  transaction  the  day  before,  then 
the  price  at  which  the  last  preceding  transaction,  whenever  it 
took  place,  was  made).  A  net  advance  (or  gain)  is  usually  in- 
dicated by  the  plus  mark,  viz :  -f  and  a  net  decline  (or  loss) 
by  the  minus  mark,  viz :  — .  Usually  only  bid  and  asked  quo- 
tations for  "outside"  stocks  are  printed. 

It  is  the  custom  of  the  newspapers  to  print  in  detail  the 
transactions  in  bonds  on  the  New  York  Stock  Exchange. 
They  print  the  transactions  in  the  order  in  which  they  are 
made.  Usually  in  reporting  a  bond  transaction  first  is  given 
the  amount  of  it  in  dollars  (the  dollar  mark,  "$,  being  omitted) 
at  the  par  (face)  value  of  the  bond  (not  the  number  of  bonds 
sold,  because  bonds  are  for  varying  amounts  up  to  $10,000 
each)  ;  then  follow  the  name  of  the  bond  and  next  and  last 
the  price  by  percentage  (the  same  as  in  reporting  sales  of 
stocks). 

Financial  condition.  The  condition  or  state  of  the  finances 
of  a  company. 

Financial  editor.  The  writer  of  the  article  in  a  newspaper 
which  describes  conditions  and  operations  in  the  financial  mar- 
kets, including  the  market  for  stocks  and  bonds.  The  London 
title  for  financial  editor  is  City  editor ;  see  City. 

Financialist.  Seldom  used;  same  as  financier;  see  Finan- 
cier. 

Financial  statement.  Same  as  balance  sheet ;  see  Balance 
sheet. 

Financial  year.     In  Great  Britain  the  term  financial  year  is 


194  SMITH'S  FINANCIAL  DICTIONARY. 

generally  used  instead  of  the  term  fiscal  year.  The  financial 
year  of  the  government  of  Great  Britain  begins  April  i. 

Financier.  One  skilled  in  or  occupied  with  financial  affairs 
or  operations. 

A  financier  is  one  who  is  adept  in  the  use  of  money ;  in  devis- 
ing and  carrying  out  plans  or  schemes  involving  the  employ- 
ment of  money ;  in  effecting  the  issuance  and  disposition  of  se- 
curities ;  in  organizing  corporations  or  enterprises ;  in  read- 
justing  or  reorganizing  the  pecuniary  affairs  of  concerns;  and 
also  in  framing  monetary  or  kindred  legislation. 

Financiered.     Same  as  financed :  see  Financed. 

Financiering.     Same  as  financing;  see  Financing. 

Financing.  Financing  an  enterprise  or  a  business  consists  in 
supplying  its  financial  requirements.  Specifically,  financing  a 
stock  company  consists  in  placing  it  in  a  satisfactory  financial 
condition  as  selling  its  stock  or  its  stock  and  bonds  or  procur- 
ing the  underwriting  of  them  and  providing  the  company  with 
working"  capital. 

In  financial  usage  preference  is  given  to  the  word  financing 
over  the  word  financiering. 

Fine  bill.     English  term  for  a  bank  bill  of  the  best  quality. 

Fine  gold.  Pure  gold.  The  value  of  an  ounce  of  fine  gold  in 
the  United  States  is  $20.67.2 ;  in  Great  Britain  the  value  is  £4, 
4  shillings  11.45  pence. 

Fineness.  In  reference  to  gold  and  silver  fineness  means  the 
proportion  of  pure  metal  and  it  usually  is  expressed  in  thou- 
sandths. The  coins  of  the  United  States,  both  gold  and  silver, 
are  .900  fine,  that  is,  nine-tenths  pure  metal  and  one-tenth  alloy. 
The  alloy  in  a  gold  coin  is  one  part  silver  and  nine  parts  cop- 
per; in  a  silver  coin  the  alloy  is  copper.  The  gold  coins  of 
Great  Britain  are  .916  2-3  fine,  while  the  silver  coins  are  .925 
fine. 

Fine  paper.  First  class  paper  (promissory  note  or  bill  of  ex- 
change or  draft). 

Finer  rate.    A  lower  rate ;  said  of  the  rate  of  discount. 

Fine  silver.     Pure  silver. 

Firm.    A  partnership. 

Also,  firm  as  used  in  a  transaction  means  fixed.    A  firm  price 


SMITH'S  FINANCIAL  DICTIONARY.  195 

is  a  fixed  price;  a  firm  bid  is  a  bid  that  will  be  adhered  to  (us- 
ually for  a  specified  or  understood  period). 

Subscribers  to  underwriting  syndicates  usually  receive  a 
commission;  when  the  subscriptions  are  firm  the  subscribers 
receive  no  commission  but  pay  the  agreed  price  for  the  securi- 
ties subscribed  for. 

First  board.  On  exchanges  where  there  are  calls  of  stocks 
and  bonds  or  calls  of  grain,  cotton,  etc.,  the  first  call  is  often 
designated  as  the  first  board. 

Also,  the  first  printed  list  of  sales  on  the  New  York  Stock 
Exchange,  covering  the  period  from  10  a.  m.  to  12  noon,  is 
called  the  first  board. 

First  class,  A  designation  meaning  without  a  superior ;  prin- 
cipally used  in  commercial  affairs. 

First  class  paper.  A  promissory  note  made  or  indorsed  or 
a  bill  of  exchange  (draft)  drawn  or  indorsed  by  a  party  in  high 
financial  standing. 

First  hands.  The  original  hands.  To  buy  at  first  hands  is 
to  buy  from  the  manufacturer  or  producer  (or  from  the  agent 
of  the  manufacturer  or  producer)  or  from  the  importer  instead 
of  from  an  intermediary,  as  a  middleman  or  jobber. 

First  mortgage.  The  mortgage  which  is  a  lien  ahead  of  all 
other  liens  (except  in  some  instances  a  prior  lien,  which  usu- 
ally represents  only  a  small  part  of  the  value  of  the  property). 

First  mortgage  bond.    A  bond  issued  under  a  first  mortgage. 

First,  second  and  third  of  exchange.  It  is  the  practise  of 
bankers  who  are  sellers  of  foreign  exchange  to  draw  their  bills 
(bills  of  exchange  or  drafts)  in  sets,  so-called — sometimes  in 
duplicate  and  sometimes  in  triplicate. 

The  entire  set  is  delivered  by  the  seller  to  the  buyer  of  ex- 
change. The  first  of  exchange  (the  original  bill)  is  forwarded 
to  the  payee  (the  one  to  whom  the  amount  of  the  bill  is  to  be 
paid)  by  one  steamer,  while  the  second  of  exchange  (a  copy  of 
the  bill)  is  sent  by  another  steamer  for  use  in  case  the  original 
bill  is  lost  or  materially  delayed  in  transit.  If  a  third  of  ex- 
change (another  copy)  is  made  out  it  is  sent  to  the  payee  by 
a  still  different  steamer  or  it  may  be  retained  by  the  buyer  of 
the  exchange  as  a  voucher.  The  payment  of  any  one  of  the 
hills  extinguishes  the  set,  or  in  other  words,  cancels  the  others. 


icj6  SMITH'S  FINANCIAL  DICTIONARY. 

First  teller.     The  paying  teller  in  a  bank. 

Fiscal.     Financial. 

Fiscal  Bank  of  the  United  States.  This  was  the  name  given 
to  a  proposed  bank  modelled  practically  on  the  same  lines  as 
the  two  Banks  of  the  United  States.  It  seems  to  have  been 
the  idea  of  its  projectors  that  the  word  Fiscal  in  the  title  would 
overcome  some  of  the  popular  objections  to  the  establishment 
of  a  third  great  national  bank. 

Congress  passed  a  bill  authorizing  the  Fiscal  Bank  of  the 
United  States  and  sent  it  to  President  Tyler  on  August  6, 
1841.  The  President  vetoed  it  on  alleged  constitutional 
grounds.  A  new  bill  meeting  the  views  of  the  President  as 
expressed  in  his  veto  was  promptly  prepared  and  passed,  but 
the  President  vetoed  that  also.  This  ended  all  serious  at- 
tempts to  create  a  great  national  bank. 

Fiscal  year.  The  twelve  months  counted  as  a  year  in  finan- 
cial operations.  The  fiscal  year  of  the  United  States  govern- 
ment and  of  a  majority  of  corporations  ends  on  June  30. 

Fishing  excursion.  Said  in  legal  proceedings  (particularly 
where  financial  matters  are  involved)  when  questions  are 
asked  for  the  purpose  of  obtaining  information  upon  which  to 
base  additional  or  other  proceedings. 

Five  ports.  When  this  term  is  used  with  reference  to  export 
trade  it  means  the  four  ports  (the  four  important  Atlantic 
ports — Boston,  New  York,  Philadelphia  and  Baltimore)  and 
New  Orleans  (which  is  a  gulf  port— a  port  on  the  Gulf  of 
Mexico). 

Fixed  bill.  A  bill  of  exchange  (draft)  or  promissory  note 
without  days  of  grace. 

Fixed  capital.  Property  that  has  reached  its  final  form  and 
that  may  be  used  many  times  in  production,  as  machinery  or 
lands. 

Fixed  charge.  A  charge  that  becomes  due  at  stated  inter- 
vals. 

In  tlie  case  of  a  railroad  fixed  charges  include  interest  on 
funded  debt,  interest  on  floating  debt,  rentals,  taxes  and  re- 
quirements of  sinking  funds.  Failure  to  pay  these  charges 
constitutes  a  legal  default.  • 


SMITH'S  FINANCIAL  DICTIONARY.  197 

Fixed  debt.  A  permanent  debt,  or  at  least  a  debt  continuing 
for  an  extended  period,  as  a  debt  represented  by  bonds. 

Fixed  exchange.  If  foreign  exchange  is  quoted  in  the 
money  of  the  country  where  issued,  but  is  payable  in  the 
money  of  the  country  where  collection  is  to  be  made,  it  is 
called  fixed  exchange.  For  instance,  exchange  on  London  is 
quoted  in  dollars  in  New  York  and  is,  therefore,  fixed  ex- 
change. The  pound  sterling  is  the  basis  and  the  amount  in 
dollars  (and  cents)  fluctuates  instead  of  the  pound  sterling. 

The  opposite  of  fixed  exchange  is  movable  exchange;  see 
Movable  exchange. 

Fixed  indebtedness.  A  permanent  indebtedness,  or  at  least 
an  indebtedness  continuing  for  an  extended  period,  as  an  in- 
debtedness represented  by  bonds. 

Fixed  liabilities.  Same  as  fixed  indebtedness ;  see  Fixed  in- 
debtedness. 

Also,  the  term  applies  to  liabilities  that  have  been  deter- 
mined, as  actual  liabilities,  in  distinction  from  contingent  lia- 
bilities. 

Fixed  liability.  A  liability  or  responsibility  which  has  been 
determined  and  is  not  in  question  or  dispute. 

Fixture.  London  money  market  term  for  a  loan  for  a  fixed 
period,  as  opposed  to  day-to-day  money,  which  is  repayable 
at  call  (on  demand). 

Flat.     Without  interest. 

When  bonds  are  sold  flat  no  additional  charge  is  made  to 
the  buyer  for  the  interest  accrued  on  them  ;  in  other  words,  the 
interest  is  included  in  the  sale. 

When  stocks  lend  flat  the  lender  has  not  to  pay  inter- 
est to  the  borrower  of  the  stock.  Ordinarily  the  borrower  of 
stock  pays  the  lender  the  market  value  of  the  stock  and  the  len- 
der pays  interest  to  the  borrower  on  this  money. 

The  rate  of  interest  paid  is  usually  a  little  less  than  the  rul- 
ing rate  for  call  money.  When  a  stock  is  lending  flat  the  fact 
signifies  that  this  particular  stock  is  in  inadequate  supply,  or 
at  least  that  it  is  not  easy  to  obtain  by  borrowers. 

When  a  stock  is  lending  at  a  premium  the  borrower  not 
only  receives  no  interest  on  the  money  that  he  advances  to  the 
lender,  but  he  also  has  to  pay  whatever  amount  may  be  agreed 


ig8  SMITH'S  FINANCIAL  DICTIONARY. 

upon  for  the  use  of  the  stock.    In  such  a  case  the  stock  is  very 
scarce  or  very  difficult  to  obtain. 

There  is  another  meaning  to  f^at ;  when  little  business  is 
done  in  the  stock  market  or  in  any  other  market  the  market 
is  said  to  be  flat. 

On  the  London  Stock  Exchange  the  word  flat  is  used, 
though  rarely,  to  indicate  that  the  quotation  for  a  stock  (bond^ 
does  not  include  accrued  interest.  Transactions  of  this  kind 
are  seldom  carried  out  in  London. 

Flexible  currency.  Another  name  for  elastic  currency ;  see 
Elastic  currency. 

Floater.  English  name  for  a  security  of  the  better  class 
payable  to  bearer;  the  name  is  applied  because  of  the  facility 
with  which  such  a  security  may  be  used  as  cover  (collateral) 
for  loans. 

Floating  a  stock  or  floating  bonds.  Same  as  placing  a  stock 
or  placing  bonds ;  marketing ;  selling.  The  term  is  generally 
applied  to  the  disposal  of  an  entire  issue  of  stock  or  bonds,  or 
at  least  a  large  part  of  an  issue. 

Floating  capital.  Capital  not  represented  by  a  permanent 
investment ;  in  other  words,  capital  invested  in  things  pro- 
duced, whether  raw  material,  articles  in  process  of  completion 
or  articles  completed,  and  in  pay  for  labor  and  services,  as 
wages  and  salaries. 

Floating  debt.  Unfunded  indebtedness ;  indebtedness  not 
represented  by  securities.  Specifically,  floating  debt  consists 
of  (i)  money  directly  borrowed;  (2)  money  owed  for  miscel- 
laneous purposes ;  (3)  money  payable  in  a  short  time. 

Floating  debt  is  the  English  name  for  the  British  govern- 
ment's temporary  liabilities  in  the  form  of  Treasury  bills,  etc., 
as  distinguished  from  the  funded  debt ;  see  Funded  debt. 

Floating  money,  ^^loney  in  the  market  not  engaged  and 
available  for  loans,  etc. 

Floating  stock.  Stock  not  held  permanently;  the  propor- 
tion of  the  capital  stock  of  a  company  available  for  specula- 
tive purposes. 

Floor.  A  name  given  to  the  board  room  (trading  room)  of 
an  exchange ;  on  the  floor  means  in  the  board  room. 

Floor  rights.     The  rights  of  brokers  on  the   floor   (in  the 


SMITH'S  FINANCIAL  DICTIONARY.  199 

board  room)  of  an  exchange  as  defined  by  the  by-laws  of  the 
exchange.     For  additional  information  see  Floor  rules. 

Floor  rules.  In  dealings  on  the  New  York  Stock  Exchange 
bids  and  offers  made  and  accepted  in  accordance  with  these 
rules  are  binding: 

All  offers  to  buy  or  sell  securities  shall  be  for  100  shares  of 
stock  or  for  $10,000,  par  value,  of  bonds  unless  otherwise 
stated.  Offers  to  buy  or  sell  specific  amounts  other  than  as 
above  stated  may  be  made  at  the  same  time  and  may  be  in- 
dependently accepted. 

Bids  and  offers  may  be  made  only  as  follows : 

Cash  (for  delivery  on  the  day  of  contract)  ;  regular  way 
(for  delivery  on  the  business  day  following  the  contract)  ;  at 
three  da^^s  (for  delivery  on  the  third  day  following  the  con- 
tract) ;  buyer's  or  seller's  option  for  not  less  than  4  days  nor 
more  than  60  days. 

Bids  and  offers  under  each  of  these  specifications  may  be 
made  simultaneously  as  being  essentially  different  proposi- 
tions and  may  be  separately  accepted  without  precedence  of 
one  over  the  other. 

Bids  and  offers  without  stated  conditions  are  considered  to 
be  in  the  regular  way. 

In  offers  to  buy  on  seller's  option  or  to  sell  on  buyer's 
option  the  longest  option  has  precedence.  In  offers  to  buy  on 
buyer's  option  or  to  sell  on  seller's  option  the  shortest  option 
has  precedence. 

Floor  trader.  Same  as  room  trader,  which  name  is  more 
commonly  used ;  see  Room  trader. 

Flotation.  The  flotation  of  a  scheme  is  the  financing  (see 
Financing)  of  it;  the  flotation  of  an  issue  (or  block — large 
amount)  of  stock  or  bonds  is  the  marketing  (selling)  of  it. 

FLT.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  fiat  (without  interest)  ;  see  Flat. 

Fluctuation.     An  upward  and  downward  mo\ement  in  price. 

The  smallest  fluctuation  (quotable  change  in  price)  per- 
mitted on  the  New  York  Stock  Exchange  is  1-8  of  i  per  cent, 
which  is  equal  to  $12.50  on  100  shares  of  stock  of  the  par  (face) 
value  of  $100  each  or  on  $10,000  of  bonds. 

The  smallest  fluctuations  in  commodities  are  :   Grain  1-8  of 


200  SMITH'S  FINANCIAL  DICTIONARY. 

I  cent  a  bushel,  equal  to  $6.25  on  5,000  bushels  (sometimes 
there  is  a  "split"  quotation  of  1-16  of  i  cent)  ;  lard,  i  cent  per 
100  pounds,  equal  to  $8.50  on  250  tierces  (85,000  pounds)  ; 
pork,  2  1-2  cents  per  barrel,  equal  to  $6.25  on  250  barrels; 
short  ribs,  2  1-2  cents  per  1,000  pounds,  equal  to  $12.50  on 
50,000  pounds ;  cotton,  i  point  (one-hundredth  of  a  cent)  per 
pound,  equal  to  $5  on  100  bales  (50,000  pounds)  ;  coffee,  5 
points  per  pound,  equal  to  $16.25  on  250  bags  (32,500  pounds)  ; 
silver  bullion,  1-8  of  i  cent  per  ounce,  equal  to  $1.25  on  1,000 
ounces. 

Flurry.  A  speculative  term,  meaning  a  sudden  commotion 
in  prices  of  securities  or  commodities  or  in  the  rates  for  money. 

Flyer.  A  term  applied  to  a  chance  venture  (speculation)  in 
stocks  or  commodities. 

F,  O.  B.  The  letters  which  stand  for  free  on  board ;  see 
Free  on  board. 

Folio.  In  bookkeeping  a  folio  is  two  pages  facing  each 
other,  both  of  which  bear  the  same  number. 

For  account  of  whom  it  may  concern.  Said  of  a  sale  the 
proceeds  of  which  are  to  go  to  the  one  on  whose  behalf  or  for 
whose  benefit  it  is  made.  The  term  is  commonly  used  in  auc- 
tion sales  when  the  name  of  the  seller  is  withheld. 

Forbearance.  Term  employed  when  a  creditor  waits  be- 
yond the  date  of  its  maturity  for  the  payment  of  a  debt. 

For  cash.  When  stocks  or  commodities  are  sold  cash  (for 
cash)  the  contract  must  be  fulfilled  on  the  day  on  which  it  is 
made.  Unless  otherwise  agreed  stocks  must  be  delivered  and 
received  before  or  at  2:15  o'clock;  on  Saturdays  before  or  at 

II  :30  o'clock. 

On  the  London  Stock  Exchange  the  usual  term  is  "for 
money."  It  means  that  delivery  and  receipt  of  the  securities 
and  payment  for  them  is  to  be  made  at  once  instead  of  waiting 
for  account  day.     Also  see  For  the  account. 

There  is  another  meaning  to  "for  cash"  as  the  term  is  used 
in  Wall  Street.  When  a  broker's  customer  buys  or  sells  for 
cash  he  pays  in  full  for  the  stocks  bought  or  receives  pay  in 
full  for  the  stocks  sold.  Stocks  cannnot,  of  course,  be  sold 
short  for  cash. 

Forced    currency.     Depreciated    paper    or    silver    currency 


SMITH'S  FINANCIAL  DICTIONARY.  201 

(money)  made  legal  tender  by  law — the  currency  is  forced  into 
circulation.  Where  forced  currency  circulates  gold  money  is 
at  a  premium. 

Forced  loan.  A  forced  loan  originates  more  frequently  in 
an  overdraft  than  in  any  other  way.  Illustration  :  A  depositor 
in  a  bank  draws  a  check  for  a  sum  larger  than  the  balance  or 
amount  standing  to  his  credit  in  the  bank.  The  bank  pays 
the  check  in  the  expectation  that  the  depositor  will  on  notifi- 
cation that  he  has  overdrawn  his  account  make  good  the  dis- 
crepancy or,  as  it  is  commonly  called,  overdraft.  He  is  not 
able  to  do  so  and  the  bank  is  forced  to  make  a  loan  to  him  of 
the  amount  of  the  shortage  in  order  to  cover  the  overdraft — 
that  is,  in  order  to  bring  his  credit  up  to  a  sum  that  equals  the 
amount  of  the  check. 

When  a  call  loan  is  called  (payment  demanded)  and  not 
paid  or  when  a  time  loan  (a  loan  for  a  specified  period)  has 
matured  and  demand  for  its  payment  is  not  complied  with 
and  the  loan  is  continued  for  a  further  period  by  the  lender  it 
is  called  a  forced  loan.  In  such  a  case  the  loan  is  continued 
because  of  the  temporary  inability  of  the  borrower  to  repay  it 
or  because  the  state  of  the  market  is  unfavorable  for  the  sale 
of  the  collateral  which  secures  the  payment  of  the  loan. 

The  Bank  of  Venice,  the  forerunner  of  the  modern  bank, 
had  its  origin  in  1171  in  a  forced  loan  which  had  been  adopted 
as  a  means  of  relieving  the  financial  necessities  of  the  Republic 
of  Venice.  The  wealthy  citizens  were  required  to  contribute 
to  a  loan.  Instead  of  the  delivery  of  bonds  to  the  citizens  as 
certificates  of  the  indebtedness  of  the  republic  to  them  the 
amounts  in  specie  which  were  received  from  them  were  placed 
to  their  credit  in  a  book  or  ledger.  The  republic  paid  punc- 
tually 4  per  cent  interest  to  the  citizens  who  had  been  levied 
upon,  but  did  not  repay  the  principal  (the  original  amounts 
exacted  from  the  citizens).  In  transactions  among  themselves 
the  citicens  fell  into  the  practise  of  transferring  to  each  other 
l)ortions  of  the  indebtedness  of  the  republic  to  them,  or  in 
other  words,  portions  of  their  credits  with  the  republic.  This 
method  of  transacting  business  was  found  so  convenient  and 
superior  to  handling  the  coined  money  that  the  republic  estab- 
lished the  Bank  of  \^enice  in  order  that  the  citizens  generally 


202  SMITH'S  FINANCIAL  DICTIONARY. 

might  deposit  their  specie  and  obtain  therefor  bank  credits. 

Forced  quotations.  Quotations  created  by  fictitious  deal- 
ings ;  wash  transactions.  For  additional  information  see 
Washing. 

Foreclosure.  Seizure  of  mortgaged  property  on  default  in 
payment  of  interest. 

Foreign  bill.  In  Great  Britain  this  term  means  a  bill  of 
exchange  on  a  foreign  country.  In  the  United  States  the 
single  word  exchange  is  generally  construed  as  meaning  a 
foreign  bill,  although  the  term  foreign  exchange  is  a  more 
definite  term. 

Foreign  commerce  or  trade.  Export  and  import  trade ;  the 
commercial  interchange  of  commodities  by  one  country  with 
other  countries. 

Foreign  credit  balance.  The  balance  in  favor  of  a  country,, 
as,  for  instance,  the  United  States,  and  against  the  rest  of  the 
world. 

Foreign  debit  balance.  The  balance  against  a  country,  as,^ 
for  instance,  the  United  States,  and  in  favor  of  the  rest  of  the 
world. 

Foreigner.  London  Stock  Exchange  term ;  a  security  is- 
sued by  a  foreign  government. 

Foreign  exchange.  The  payment  of  an  obligation  in  a  place 
in  one  country  by  the  transfer  of  a  credit  from  a  place  in 
another  country  by  means  of  a  bill  of  exchange  (a  draft  or 
order  for  money) ,  as  a  bill  drawn  in  New  York  and  payable  in 
London. 

Illustration :  A  in  London  owes  $100,000  (or  the  equiva- 
lent in  pounds  sterling)  to  B  in  New  York ;  likewise,  C  in  New 
York  owes  $100,000,  or  the  equivalent  of  that  sum,  to  D  in 
London.  A  in  London  buys  a  bill  of  exchange  on  New  York 
(collectable  in  New  York)  for  the  amount  of  his  obligation 
and  forwards  it  to  B  in  New  York ;  likewise,  C  in  New  York 
buys  a  bill  of  exchange  on  London  (collectable  in  London)  for 
the  amount  of  his  obligation  and  forwards  it  to  D  in  London. 
Thus,  both  A  and  C  have  paid  what  they  owed,  while  B  and  D 
have  received  what  was  due  them,  and  no  money  has  crossed 
the  ocean  in  settling  the  accounts. 

A  merchant  in  New  York  usually  pays  for  goods  bought  in 


SMITH'S  FINANCIAL  DICTIONARY.  203 


London  or  Paris  with  a  bill  of  exchange  or  draft  purchased 
from  a  bank  or  banker  in  New  York  which  is  payable  by  the 
correspondent  (bank  or  banker)  in  London  or  Paris,  as  the 
case  may  be,  of  the  New  York  bank  or  banker.  The  bill  of 
exchange  saves  much  trouble  and  expense  to  the  remitter  (the 
merchant).  It  is  payable  in  English  or  French  money,  as  the 
case  may  be,  and  is  purchased  at  the  equivalent  in  United 
States  money.  The  foregoing  is  an  instance  where  exchange 
is  bought. 

Following  is  an  instance  where  exchange  is  sold :  A  in 
New  York  makes  a  shipment  of  goods  to  B  in  London  for 
which  immediate  payment  is  to  be  made.  A  makes  out  a  draft 
on  B  for  the  amount  (that  is,  the  amount  in  money)  due  him 
and  attaching  to  the  draft  the  bill  of  lading  for  the  goods  sells 
the  draft  to  a  dealer  in  foreign  exchange  in  New  York,  who 
forwards  it  to  his  correspondent  in  London  for  collection  from 
B.  Thus,  A  receives  pay  for  his  goods  as  soon  as  they  are 
shipped — he  has  not  to  ship  the  goods,  wait  for  them  to  reach 
London,  and  then  wait  for  a  ship  to  bring  back  gold  in  pay- 
ment for  them,  nor  even  to  wait  for  the  mail  to  bring  back  a 
draft  bought  by  B  in  London  on  some  bank  or  banker  in  New 
York ;  much  less  has  he  to  wait  for  B  to  receive  the  goods,, 
draw  a  check  on  his  own  (B's)  bank  in  London,  and  send  it  to 
him  (A  in  New  York),  who  would  have  to  sell  the  check  to 
some  dealer  in  foreign  exchange  in  New  York.  B,  on  the 
other  hand,  by  receiving  the  bill  of  lading  for  the  goods  when 
the  draft  is  presented  to  him  for  payment  knows  not  only  that 
the  goods  have  been  shipped  to  him  by  A,  but  by  possession 
of  the  bill  of  lading  holds  actual  title  to  them. 

A  draft  (such  as  A  draws  on  B  in  the  foregoing  example)  ac- 
companied by  a  bill  of  lading  and  other  papers  (policy  of  in- 
surance, etc.)  is  termed  a  documentary  bill  for  payment.  In 
case  payment  is  not  to  be  made  immediately  (as  by  the  pay- 
ment of  a  draft  at  sight — a  draft  payable  on  demand  or  pres- 
entation), but  at  some  future  time,  although  delivery  of  the 
goods  is  to  be  made  on  their  arrival  in  London,  the  party 
drawn  upon  (who  is  to  pay  the  bill  at  maturity)  accepts  the 
draft  (writes  on  its  face  his  acceptance — his  acknowledgment 
of  the  obligation  and  a  promise  to  pay  it  when  due)  and  the  bill 


204  SMITH'S  FINANCIAL  DI'CTIONARY. 

of  lading  is  surrendered  to  him,  the  possession  of  the  bill  of 
lading  enabling  him  to  obtain  possession  of  the  goods.  A 
draft  to  be  accepted  for  payment  at  a  future  time  accompanied 
by  a  bill  of  lading  and  other  papers  is  termed  a  documentary 
bill  for  acceptance. 

Bills  payable  on  demand  or  sight  (that  is,  on  presenta- 
tion) are  called  sight  bills ;  bills  payable  in  lo  to  30  days  are 
called  short  bills ;  bills  payable  in  60  days  or  in  a  longer  period 
are  called  long  bills.  There  are  also  cable  transfers  by  which 
money  (or  credit)  is  transferred  by  cable.  These,  for  brevity, 
are  called  cables. 

Bills  drawn  by  banks  or  bankers  against  their  credits 
abroad  are  called  bankers'  bills.  These  include  letters  of 
credit.  Bills  drawn  against  shipments  of  commodities  or 
manufactures  are  called  commercial  bills.  Specifically,  grain 
bills  are  drawn  against  grain  shipped  and  cotton  bills  are 
drawn  against  cotton  shipped. 

Dealers  in  foreign  exchange  do  not  ordinarily  resell  the 
commercial  and  other  bills  which  they  buy.  These  they  for- 
ward for  collection  or  in  cover  (in  payment)  of  their  own  bills. 
The  bills  they  sell  are  their  own  bills  which  are  drawn  against 
credits  they  themselves  have  negotiated  abroad  or  against 
credits  that  they  have  created  by  forwarding  the  commercial 
and  other  bills  they  have  purchased. 

A  banker's  bill  of  foreign  exchange  is  drawn  (and  delivered 
to  the  buyer)  in  sets,  so-called — in  duplicate  or  triplicate  and 
numbered  first  and  second,  or  first,  second  and  third  of  ex- 
change, respectively,  requesting  payment  of  money  as  men- 
tioned in  each.  The  one  first  presented  is  paid  and  the  payment 
of  this  one  extinguishes  (cancels)  the  others.  Where  a  bill 
is  issued  in  duplicate  the  two  copies  are  forwarded  for  collec- 
tion, each  by  a  different  steamer  (to  provide  against  the  loss 
or  delay  of  one).  If  a  third  copy  is  furnished  it  is  retained  by 
the  purchaser  of  the  bill  as  a  voucher  or  it  may  be  forwarded 
by  a  third  steamer.  A  bill  of  exchange  is  transferable  by 
indorsement  the  same  as  a  check. 

Following  is  the  usual  form  of  a  60-day  bill  of  exchange 
drawn  in  triplicate : 


SMITH'S  FINANCIAL  DICTIONARY.  203 

Exchange  for   £1,000.  New  York,  January  i,  1904. 

At  sixty  days  after  date  of  this  our  First  of  Exchange  (second  and 
third  of  the  same  tenor  and  date  unpaid)  pay  to  the  order  of  James 
Robinson  One  thousand  Pounds  sterling,  and  charge  the  same,  without 
further  advice,  to 

No.  5,005.  Brown,  Green  &  Co. 

To  White,  Black  &  Co., 
London. 

When  America  is  largely  indebted  to  Europe  drafts  (bills 
of  exchange)  drawn  in  America  on  Europe,  that  is,  payable  in 
Europe,  are  likely  to  command  a  premium,  or  in  other  words, 
are  likely  to  be  worth  more  than  their  face  value  (or  the  equiv- 
alent of  their  face  value).  On  the  other  hand,  when  Europe 
is  largely  indebted  to  America  drafts  drawn  in  America  on 
Europe  are  likely  to  be  at  a  discount,  or  in  other  words,  are 
likely  to  be  quoted  at  less  than  their  face  value  (or  the  equiva- 
lent of  their  face  value). 

Bills  on  Great  Britain  are  payable  in  pounds  sterling,  on 
France  in  francs,  on  Germany  in  marks,  on  Hollaiid  in  guilders, 
etc.     Bills  payable  in  pounds  sterling  are  called  sterling  bills. 

Conditions  of  exchange  are  greatly  involved  when  between 
a  country  having  a  gold  standard,  where  the  value  of  money  is 
fixed,  and  a  country  having  a  silver  standard  or  using  a  depre- 
ciated paper  currency,  where  the  value  of  money  is  fluctuating. 
They  are  even  more  involved  when  between  two  countries  both 
of  which  have  currencies  of  fluctuating  value. 

If  A  in  New  York  desires  to  pay  B  in  London  £100,000  the 
exact  amount  in  United  States  money  which  will  equal  this 
sum  is  $486,656.  The  remittance  of  this  amount  in  United 
States  gold  coin  would  not  ordinarily  cancel  the  obligation 
for  the  reason  that  the  coin  accumulated  for  the  purpose  would 
be  short  in  weight  owing  to  abrasion  or  wear  in  use.  It 
would,  therefore,  be  necessary  to  add  coin  to  make  up  the  defi- 
ciency in  weight.  If,  however,  the  United  States  Treasury  is 
selling  assay  office  bars  at  par  (it  generally  charges  a  commis- 
sion of  1-8  of  I  per  cent)  $486,656  may  be  deposited  in  the 
Treasury  and  bullion  obtained  worth  an  equal  amount  in 
London,  that  is,  worth    £100,000  in  London. 

Should  A  be  able  to  obtain  British  sovereigns  100,000  of 
them,  if  only  normally  abraded  or  worn  (that  is,  not  abraded 


206 


SMITH'S  FINANCIAL  DICTIONARY. 


or  worn  to  such  an  extent  as  to  prevent  their  acceptance  in 
London  at  their  face  value),  will  discharge  the  obligation.  In 
this  case  the  deficiency  in  weight  has  not  to  be  made  up ;  in- 
deed, if  the  sovereigns  can  be  bought  by  weight  there  will  be 
a  profit  in  their  purchase. 

The  following  table  shows  the  equivalent  values  of  the 
moneys  of  countries  in  which  and  with  which  exchange  deal- 
ings are  large : 


o 

Q 


X 

J< 

u 

M 

« 

d 

G 

c 

£ 

;    [ 

tS 

V2 

Ui 

x; 

.c 

fe 

o 

■J) 

Pi 

•a 


Dollar  (United  States) 

£i,  or  20  shillings   (Great  Britain) 

Franc    (France)     

Reichsmark    (Germany)     

Guilder    (Netherlands — Holland)     . 


4.86.6 

•  19-3 
.23.8 
.40.2 


4.1 1 

5.18 

4.20 

25.22 

20.43 

■79 

.81 

.98 

1.24 

1.6s 

2.C8 

1.69 

2.49 

12.10 
.48 
.59 


The  official  name  of  the  reichsmark  is  mark ;  reichsmark 
means  imperial  mark  or  the  mark  according  to  the  govern- 
ment standard ;  the  addition  of  reichs  is  superfluous,  but  it  is, 
nevertheless,  retained  in  exchange  dealings  and  in  other  inter- 
national financial  transactions. 

The  official  name  of  the  guilder  is  florin ;  guilder  is  the  old 
name,  but  it  is,  nevertheless,  retained  in  exchange  dealings 
and  in  other  international  transactions. 

For  the  equivalents  of  all  foreign  moneys  in  United  States 
money  and  also  in  the  money  of  Great  Britain  see  Moneys  of 
the  world. 

When  a  bill  of  exchange  is  quoted  in  the  mone}-  of  the 
country  where  it  is  issued,  but  is  payable  (is  to  be  paid) 
in  the  money  of  the  country  upon  which  it  is  drawn  (where 
it  is  payable),  the  higher  the  quotation  (or  rate)  the  higher 
is  the  cost  of  such  exchange  for  the  reason  that  a  high  rate 
requires  more  of  the  money  of  the  country  where  the  bill  is 
purchased  to  buy  a  given  amount  of  the  money  of  the  country 
where  the  bill  is  payable  than  a  low  rate  requires. 

On  the  other  hand,  when  a  bill  of  exchange  is  quoted  in  the 
money  of  the  country  upon  which  it  is  drawn  (which  is  also 
the  money  in  wdiich  it  is  to  be  paid),  as  francs,  the  higher  the 


SMITH'S  FINANCIAL  DICTIONARY.  207 

■quotation  the  less  is  the  cost  of  such  exchange  for  the  reason 
that  more  in  the  foreign  country's  money  can  be  purchased  for 
^1  at  a  high  rate  than  can  be  purchased  at  a  low  rate. 

Illustration:  If  exchange  for  £1  is  purchased  for  $4.89  it 
costs  more  than  if  purchased  at  $4.84.  On  the  other  hand,  if 
-exchange  for  5.25  francs  (5  francs  25  centimes)  is  purchased 
for  $1  it  costs  less  than  if  exchange  for  5. 11  francs  is  purchased 
for  $1  ;  or,  putting  it  another  way,  $1  buys  more  in  francs  at 
the  high  rate  than  it  buys  at  the  low  rate. 

Instead  of  saying  exchange  on  London  or  exchange  on 
Paris  i':  is  the  common  practise  to  abbreviate  the  expression 
to  London  exchange  or  Paris  exchange. 

Exchange  is  in  favor  of  one  country  and  against  another 
when  the  balance  of  trade  (or  balance  of  international  account) 
between  the  two  countries  is  in  favor  of  the  first  and  against 
the  second.  In  other  words,  exchange  is  in  favor  of  a  credit- 
or country  and  against  a  debtor  country. 

Pligh  cost  for  exchange  implies  that  the  balance  is  against 
the  country  where  the  high  cost  prevails ;  conversely,  low  cost 
for  exchange  implies  that  the  balance  is  in  favor  of  the  country 
where  the  low  cost  prevails. 

It  is  the  custom  to  speak  of  exchange  on  Great  Britain  as 
sterling  (not  as  sterling  exchange),  on  France  as  francs,  on 
Germany  as  reichsmarks,  on  the  Netherlands  (Holland)  as 
guilders,  and  so  on. 

Foreign  bills  of  exchange  are  not  said  to  have  been  dis- 
counted, but  to  have  been  sold. 

Foreign  exchange  loan.  When  a  loan  of  foreign  exchange 
is  made  exchange  is  loaned ;  the  money  represented  by  the 
exchange  is  not  loaned,  but  a  bill  of  exchange  is  loaned.  If 
the  borrower  has  an  obligation  that  is  payable  at  home  he  may 
use  the  bill  in  meeting  it  or  he  may  sell  the  bill  and  use 
instead  the  money  received  for  it.  If  the  obligation  is  payable 
abroad  he  presumably  will  forward  the  bill  in  payment  of  it. 
Collateral  (security)  may  be  and  generally  is  deposited  with 
the  lender. 

Sometimes — in  fact,  frequently — the  lender  of  the  exchange 
sells  the  bill  and  delivers  the  money  to  the  borrower.  When 
the  loan  matures  (becomes  due)  the  borrower  pays  it  by  de- 


2o8  SMITH'S  FINANCIAL  DICTIONARY. 

livering  to  the  lender  a  sight  or  demand  bill  for  the  amount  of 
it,  which  bill  he  has  purchased  for  the  purpose ;  or,  he  may  pay 
the  lender  in  cash  at  the  existing  rate  for  sight  or  demand 
exchange. 

It  may  be  that  the  exchange  is  borrowed  abroad,  in  which 
case  the  borrower  is  authorized  to  draw  on  the  lender  for  the 
amount  borrowed.  The  borrower  makes  out  a  draft,  which 
is  accompanied  with  the  letter  granting  authority  to  draw,  and 
if  collateral  is  to  be  provided  the  draft  also  is  accompanied 
with  stocks,  bonds,  bill  of  lading,  warehouse  receipts  or  what- 
ever form  of  security  is  stipulated. 

If  the  borrower  has  an  obligation  that  is  payable  at  home  he 
may  use  the  bill  (draft)  itself  in  meeting  it  or  he  may  sell  the 
bill  and  use  instead  the  money  received  for  it.  If  the  obliga- 
tion is  payable  abroad  he  presumably  will  forward  the  bill  in 
discharging  it. 

A  loan  in  pounds  sterling  is  called  a  sterling  loan  or  a  loan 
of  sterling ;  one  in  francs  is  called  a  loan  of  francs ;  one  in 
reichsmarks  is  called  a  loan  of  reichsmarks,  and  so  on. 

Foreign  exchange  rates.  The  quotation  "actual  rate"  means 
the  rate  at  which  exchange  is  sold  in  large  amount  by  a  dealer ; 
the  quotation  "posted  rate"  means  the  preliminary  asking  rate 
of  the  day  before  an  actual  rate  is  made  and  this  is  the  rate 
usually  exacted  for  a  small  amount  of  exchange  by  a  dealer. 
The  actual  and  posted  rates  are  the  rates  at  which  dealers  sell 
bills  of  exchange  issued  by  themselves.  They  do  not  as  a 
rule  announce  the  rates  at  which  they  will  buy  commercial 
bills  of  exchange ;  that  is  a  matter  of  negotiation  and  depends 
on  the  nature  of  the  bills.  The  newspapers,  however,  publish 
approximate  prices  for  commercial  bills. 

Foreign  exchange  is  payable  in  the  money  of  the  country 
upon  which  the  exchange  is  drawn — that  is,  where  the  ex- 
change is  payable. 

The  exact  equivalents  (making  no  allowance  for  interest  or 
any  other  charge)  calculated  in  the  way  that  exchange  is 
quoted  in  the  United  States  are  for  dififerent  moneys  as  follows  : 
$4.86.65  equals  £1  (Great  Britain);  $1  equals  5.18  francs 
(France,  Switzerland,  Belgium)  ;  4  marks  (Germany)  equals 
95.2   cents;    i    guilder   or   florin    (Holland — the    Netherlands) 


SMITH'S  FINANCIAL  JJJCTIONARV.  209 

equals  40.2  cents ;  1  krone  or  crown  (Sweden,  Norway,  Den- 
mark) equals  26.8  cents ;  i  krone  or  crown  (Austria)  equals 
20.3  cents;  $1  equals  5.18  lire  (Italy). 

The  equivalent  of  $1  in  English  money  is  49.3  pence  or  4 
shillings  1.3  pence. 

When  foreign  exchange  is  quoted  in  the  money  of  the 
country  where  it  is  bought  the  unit  of  money  of  the  country 
where  payable  is  figured  at  so  much  in  the  money  of  the  coun- 
try where  the  bill  is  issued.  Thus,  when  sterling  exchange  is 
quoted  at  $4.86.65  £1  in  exchange  is  worth  $4.86.65. 

When  foreign  exchange  is  quoted  in  the  money  of  the  coun- 
try where  it  is  payable  (not  where  it  is  bought)  the  unit  of 
money  of  the  country  where  it  is  bought  is  figured  at  so  much 
in  the  money  of  the  country  where  the  bill  is  payable.  Thus, 
when  exchange  on  France  is  quoted  at  5.18  (5  francs  18  cen- 
times) $1  in  exchange  is  worth  5.18  francs. 

When  a  bill  of  exchange  is  quoted  in  the  money  of  the 
country  in  which  it  is  issued,  but  is  payable  (is  to  be  paid) 
in  the  money  of  the  country  upon  which  it  is  drawn  (where 
it  is  payable),  the  higher  the  quotation  (or  rate)  the 
higher  is  the  cost  of  such  exchange  for  the  reason  that  a  high 
rate  requires  more  of  the  money  of  the  country  where  the  bill 
is  purchased  to  buy  a  given  amount  of  the  money  of  the  coun- 
try where  the  bill  is  payable  than  a  low  rate  requires. 

On  the  other  hand,  when  a  bill  of  exchange  is  quoted  in  the 
money  of  the  country  upon  which  it  is  drawn  (which  is  also 
the  money  in  which  it  is  to  be  paid),  as  francs,  the  higher  the 
quotation  the  less  is  the  cost  of  such  exchange  for  the  reason 
that  more  in  the  foreign  country's  money  can  be  purchased  for 
$1  at  a  high  rate  than  can  be  purchased  at  a  low  rate. 

Illustration  :  If  exchange  for  £  i  is  purchased  for  $4.89  it 
costs  more  than  if  purchased  at  $4.84.  On  the  other  hand,  if 
exchange  for  5.25  francs  (5  francs  25  centimes)  is  purchased 
for  $1  it  costs  less  than  if  $1  is  paid  for  5.1 1  francs ;  or,  putting 
it  another  way,  $1  buys  more  in  francs  at  the  high  rate  than  it 
buys  at  the  low  rate. 

The  amount  paid  for  a  time  bill  depends  on  the  length  of 
time  it  has  to  run  and  tlie  rate  of  interest  prevailing  in  the 
country  where  the  bill  is  payable.     A  commercial  bill  payable 


210  SMITH'S  FINANCIAL  DICTIONARY. 

in  London  three  months  after  date  is  bought  by  a  dealer  in 
exchange  in  New  York  at  a  price  which  is  equal  to  a  bill  pay- 
able on  demand,  less  three  months'  interest  at  the  existing  rate 
of  interest  in  London.  The  London  rate  of  interest  serves  as 
the  basis  in  calculating  the  price  of  the  bill  for  the  reason  that 
the  bill  is  payable  in  London  and  to  make  it  equal  to  a  draft 
payable  on  demand  in  London  it  must  be  discounted  in 
London. 

High  cost  for  exchange  ordinarily  means  that  the  interna- 
tional balance  is  against  the  country  where  the  high  cost  pre- 
vails ;  conversely,  low  cost  for  exchange  ordinarily  means  that 
the  international  balance  is  in  favor  of  the  country  where  the 
low  cost  prevails. 

Foreign  loan.  A  loan  issued  by  a  foreign  government  in  the 
form  of  bonds  or  other  certificates  of  debt,  such  as  exchequer 
bills  or  notes,  treasury  bills  or  notes,  etc. 

The  term  foreign  loan  also  is  applied  to  a  loan  obtained  in  a 
foreign  country  by  a  corporation,  firm  or  individual.  In  the 
case  of  such  a  loan  the  usual  practise,  if  security  is  to  be  pro- 
vided, is  for  the  borrower  to  draw  against  the  loan  and  to  ac- 
company the  draft  with  collateral  which  may  be  securities 
(stocks  or  bonds)  or  documents  (bills  of  lading,  warehouse 
receipts,  etc). 

Also  see  Foreign  exchange  loan. 

Foreign  money.  The  money  of  another  country.  For  in- 
formation as  to  all  moneys  see  Moneys  of  the  world. 

Foreign  port  stocks.  This  term  applies  to  stocks  of  grain 
in  warehouses  at  the  leading  ports  of  Europe. 

Foreign  rails.  London  Stock  Exchange  designation  for  the 
securities  of  railway  companies  in  foreign  countries  (except 
Americans,  which  are  dealt  in  in  a  market  of  their  own). 

Foreign  trade.  Same  as  external  trade  or  commerce ;  the 
exports  and  imports  of  a  country ;  that  is,  its  trade  (purchases 
and  sales)  with  another  country. 

Forfeiture.     Loss  of  property  by  some  act  or  omission. 

For  honor.  See  Acceptance  for  honor ;  also  see  Payment  for 
honor. 

For  money.  The  London  Stock  Exchange  term  which  is 
equivalent  to  for  cash  ;  see  For  cash. 


SMITH'S  FINANCIAL  DICTIONARY.  211 

For  shipment.  Anything  bought  for  shipment  is  bought 
with  the  provision  that  it  shall  be  shipped  at  or  within  a  speci- 
fied time. 

For  the  account.  When  securities  are  bought  or  sold  for 
the  account  the  transaction  is  a  marginal  one  (on  margin)  for 
the  account  and  risk  of  the  buyer  or  the  seller,  as  the  case 
may  be. 

'  In  a  marginal  transaction  the  presumption  is  that  in  case  of 
a  purchase  the  securities  are  to  be  sold  at  a  subsequent  time, 
while  in  the  case  of  a  sale  the  presumption  is  that  the  securities 
are  to  be  bought  back  later. 

On  the  London  Stock  Exchange  "for  the  account"  means 
that  the  securities  are  to  be  delivered  and  received  and  paid  for 
in  the  next  fortnightly  settlement.  For  additional  information 
see  Account,  The. 

For  the  coming  out.  London  Stock  Exchange  term  for  a 
bargain  (contract)  in  shares  or  stock  which  have  been  author- 
ized but  not  yet  issued.  The  certificates  are  to  be  delivered 
when  issued  and  payment  is  then  to  be  made  for  them.  In 
the  New  York  stock  market  such  a  contract  is  designated 
as  "when  issued,"  meaning  that  the  certificates  are  to  be  deliv- 
ered when  issued,  and  are  then  to  be  paid  for. 

For  the  long  account.  When  stocks  are  bought  on  margin 
they  are  bought  for  the  long  account.  The  expression  is  little 
used  except  in  referring  to  the  aggregate  as  distinguished 
from  individual  buying.  Buying  to  close  short  contracts  is 
not,  of  course,  buying  for  the  long  account. 

For  the  new  account.  London  Stock  Exchange  term  for 
bargains  (transactions)  which  are  to  be  included  in  the  ac- 
count following  a  fortnightly  settlement.  The  new  account 
begins  on  the  first  day  of  the  fortnightly  settlement. 

For  the  opening.  When  a  stock  is  sold  for  the  opening  de- 
livery of  it  to  the  purchaser  is  to  be  made  on  the  opening  of  the 
transfer  books  of  the  company  which  issued  it.  The  delay  in 
delivery  until  that  time  is  because  the  stock  has  been  assigned 
to  a  specified  individual  by  the  original  owner  instead  of  hav- 
ing been  assigned  (or  signed)  in  blank  (see  Assigned  in 
blank)   and,  therefore,  not  being  a  deliver}^  (not  being  in  de- 


212  SMITH'S  FINANCIAL  DICTIONARY. 

liverable  form)    it   is   necessary   to   wait   until   a   new   certifi- 
cate can  be  obtained  before  making  delivery  to  the  buyer. 

Also  see  At  the  opening. 

For  the  short  account.  When  stocks  are  sold  short  on 
margin  they  are  sold  for  the  short  account.  The  expression  is 
little  used  except  in  referring  to  the  aggregate  as  distinguished 
from  individual  short  selling. 

Fortnightly  settlement.     See  Settlement,  The. 

Forward  delivery.  Delivery  at  a  future  time ;  same  as  fu- 
ture delivery. 

Forwarder.  A  person,  firm  or  corporation  whose  business 
is  to  receive  goods  for  transportation.  A  commission  is 
charged  for  storing  the  goods  and  delivering  them  to  the  line 
by  which  they  are  to  be  transported. 

Forwarding  merchant.     A  forwarder ;  see  Forwarder. 

Forwarding  securities.  For  directions  for  forwarding  se- 
curities see  Investment  securities. 

Forward  quotation.  The  price  for  delivery  at  a  future 
specified  date. 

For  whom  it  may  concern.  Same  as  for  account  of  whom  it 
may  concern ;  said  of  a  sale  the  proceeds  of  which  are  to  go  to 
the  one  on  whose  behalf  or  for  whose  benefit  it  is  made.  The 
term  is  commonly  used  in  auction  sales  when  the  name  of  the 
seller  is  withheld. 

For  your  account.  When  a  broker  on  the  New  York  Stock 
Exchange  executes  an  order  for  another  broker  who  is  to  re- 
ceive or  deliver  the  stock,  as  the  case  may  be,  he  "gives  up"  to 
the  broker  with  whom  he  makes  the  transaction  the  name  of 
his  principal  (the  broker  for  whom  he  is  acting).  If  the 
broker  to  whom  he  has  sold  or  from  whom  he  has  bought 
does  not  wish  to  accept  the  name  given  up  to  him  he  says  "for 
your  account"  and  the  broker  who  was  acting  for  a  person 
other  than  himself  is  himself  obliged  to  assume  the  contract. 
A  rule  of  the  exchange  is  that  no  broker  shall  be  compelled  to 
accept  a  principal  other  than  the  broker  ofifering  to  contract, 
unless  the  broker  so  offering  shall  in  making  the  offer  declare 
the  name  of  the  person  whom  he  proposes  to  substitute  for 
himself. 

Founders'   shares.     Shares  which   are  sometimes   given   to 


SMITH'S  FINANCIAL  DICTIONARY.  213 

the  founders  and  promoters  of  a  company ;  such  shares  gener- 
ally divide  the  surplus  profits  with  the  common  shares  after  a 
certain  percentage  has  been  paid  on  the  latter.  These  shares 
are  seldom  created  now  and  are  viewed  with  disfavor  by  finan- 
cial critics. 

Four  ports.  When  this  term  is  used  with  reference  to  ex- 
port trade  it  means  the  four  principal  ports  on  the  Atlantic 
coast — Boston,  New  York,  Philadelphia  and  Baltimore. 

Fourteen  hundred.  An  expression  shouted  when  a  stranger 
wanders  into  the  London  Stock  Exchange.  Years  ago,  it  is 
said,  the  membership  of  the  exchange  remained  for  nearly  two 
years  at  1399  and  it  came  to  be  a  matter  of  interest  as  to  who 
should  be  the  fourteen  hundredth.  One  day  an  unmistakable 
stranger  strolled  into  the  exchange  and  a  waggish  member 
introduced  him  as  No.  1400. 

The  corresponding  expression  on  the  New  York  Stock  Ex- 
change is  New  Tennessee,  which  see. 

Fourth  week.  The  fourth  week  in  a  month  differs  from  the 
other  three  weeks  in  the  month  in  compiling  and  reporting 
railroad  earnings.  The  first  seven  days  are  counted  as  the 
first  week,  the  second  seven  days  as  the  second  week  and  the 
third  seven  days  as  the  third  week,  while  the  remaining  days 
of  the  month  are  counted  as  the  fourth  week.  In  a  month  of 
30  days  the  fourth  week  consists  of  nine  days  and  in  a  month 
of  31  days  it  consists  of  ten  days.  Thus,  the  fourth  week  may 
contain  two  Sundays. 

For  additional  information  see  Railroad  earnings. 

Fowler  banking  and  currency  bill.  The  name  given  to  a 
bill  providing  for  an  asset  currency  which  was  prepared  by 
the  House  Committee  on  Banking  and  Currency  of  the  Fifty- 
seventh  Congress  and  introduced  by  Charles  N.  Fowler,  of 
New  Jersey,  chairman  of  the  committee.  For  the  provisions 
of  the  bill  see  Asset  currency. 

Fractional  coin.  Same  as  divisional  or  subsidiary  coin  ;  see 
Subsidiary  coin. 

Fractional  currency.  Subsidiary  silver  coins  (half-dollar, 
quarter-dollar  and  dime  or  10  cent  piece),  and  minor  coins 
(5-cent  nickel  and  i-cent  bronze). 


214  SMITH'S  FINANCIAL  DICTIONARY. 

Fractional  lot.  Same  as  odd  lot;  in  stocks  less  than  loo 
shares  of  stock  and  less  than  $10,000  bonds. 

Franchise.  A  privilege  conferred  by  grant  from  a  govern- 
ment (national,  state  or  municipal)  to  a  corporation  or  an 
individual.  The  right  obtained  from  the  proper  authority  to 
build  a  railroad  from  one  point  to  another  constitutes  a  fran- 
chise. 

Franking.  When  the  franking  privilege  in  the  mails  is 
accorded  the  person  possessing  it  is  permitted  to  send  mail 
matter  free  by  writing  or  stamping  his  name  on  the  envelope 
or  package.  Members  of  Congress  are  allov^ed  to  frank  (send 
free)  pubHc  documents. 

The  franking  privilege  is  sometimes  accorded  to  persons 
for  special  reasons  by  telegraph  companies,  express  compa- 
nies, etc. 

Fraud.  Expulsion  is  the  penalty  for  any  member  of  an  ex- 
change convicted  by  its  governing  body  of  fraud  in  his  deal- 
ingfs  with  another  member  or  with  a  non-member.  There  is 
no  lesser  penalty. 

Fraudulent  conveyance.  A  conveyance  without  adequate 
consideration,  made  for  the  purpose  of  delaying,  hindering  or 
defrauding  creditors. 

Free  alongside  ship.  A  mercantile  term ;  means  that  goods 
are  delivered  alongside  (by  the  side  of)  the  ship,  with  all 
charges  paid  up  to  that  time.  The  buyer's  responsibility  then 
begins  and  includes  the  placing  of  the  goods  on  board  the  ship. 

Free  banking  system.  Previous  to  the  panic  of  1835  there 
were  no  general  laws  in  any  of  the  states  providing  for  the 
incorporation  of  banking  associations.  Each  bank  operated 
under  a  special  charter  passed  for  its  own  benefit.  This  sys- 
tem of  incorporation  had  aroused  much  opposition  on  the 
grounds  of  monopoly,  favoritism  and  corruption  and  log- 
rolling in  the  various  legislatures.  After  the  panic  of  1835 
there  was  an  agitation  in  favor  of  general  banking  laws  under 
which  any  body  of  men  associated  together  for  the  purpose 
could  by  complying  with  the  law  engage  in  the  banking 
business. 

An  essential  feature  of  banking  at  that  time  was  the  privilege 
of  issuing  notes  and  the  chief  concern  of  the  advocates  of  a 


SMITH'S  FINANCIAL  DICTIONARY.  215 

general  or  free  banking  system  was  to  provide  some  method 
for  making  such  notes  secure  and  acceptable  to  the  public. 
The  device  generally  decided  upon  was  to  require  the  banks  to 
deposit  in  the  custody  of  the  authorities  of  the  state  from 
which  they  received  their  charter  approved  securities  equal  in 
value  to  the  notes  issued. 

The  first  law  of  this  character  was  enacted  in  Michigan  in 
1S37.  Xcw  York  followed  in  1838.  The  New  York  law, 
which  was  very  similar  in  principle  to  the  Michigan  law,  pro- 
vided that  any  person  or  association  of  persons  might  receive 
from  the  Comptroller  of  the  state  circulating  notes  and  after 
signing  them  might  issue  them  as  money  by  first  depositing 
with  the  Comptroller  stocks  (bonds)  of  the  United  States,  of 
the  state  of  New  York  or  any  other  state  approved  by  the 
Comptroller,  or  bonds  and  mortgages  on  improved,  productive 
and  unencumbered  real  estate  worth  double  the  amount  of  the 
mortgage,  exclusive  of  the  buildings  thereon,  and  bearing  in- 
terest at  not  less  than  6  per  cent.  The  result  was  a  great 
emission  of  notes,  a  great  depreciation  in  the  value  of  the 
notes,  and  the  failure  of  many  banks  issuing  them  when  they 
were  required  by  subsequent  enactment  to  make  provision 
for  the  prompt  redemption  of  their  notes. 

The  disastrous  effects  of  both  the  Michigan  and  New  York 
laws  were  attributed,  however,  more  to  faulty  construction 
and  poor  administration  than  to  any  wrong  principle.  As  the 
acts  were  gradually  modified  and  strengthened  their  actual 
operation  became  more  satisfactory  and  the  New  York  law 
was  practically  the  model  for  the  national  banking  system. 

Meanwhile,  many  other  states  followed  the  example  of 
Michigan  and  New  York,  but  their  laws  were  so  loosely  drawn 
and  the  administration  of  them  was  so  bad  that  the  grossest 
frauds  were  perpetrated  and  state  bank  notes  became  a  syno- 
nym for  worthlessness.  Some  of  the  devices  resorted  to  and 
the  disastrous  results  that  followed  are  described  under  the 
head  Wildcat  money. 

The  growing  importance  in  banking  of  the  deposit  and  dis- 
count branches  of  the  business  and  the  Federal  tax  of  10  per 
cent  on   the  notes  of  state  banks  have  since  the  Civil  War 


2i6  SMITH'S  FINANCIAL  DICTIONARY. 


eliminated  the  entire  question  of  note  issuing  from  the  calcula- 
tions of  state  banks  operating  under  the  free  banking  system. 

Free  bonds.  United  States  bonds  owned  by  national  banks 
which  are  not  pledged  as  security  for  circulation  or  govern- 
ment deposits  are  designated  as  free  bonds. 

Free  coinage.  The  coinage  into  money  without  charge  of 
metal  deposited  in  a  mint  or  other  government  depository  by 
individuals.  In  the  United  States  gold  is  the  only  metal  to 
which  the  privilege  of  free  coinage  is  extended. 

When  bullion  is  bought  and  coined  by  a  government,  as  in 
the  case  of  silver,  the  profit  or  seigniorage  belongs  to  it ;  this  is 
termed  coining  on  government  account. 

Free  gold.  Same  as  net  gold ;  the  amount  of  gold  held  in 
the  Treasury  of  the  United  States  in  excess  of  the  ^um  re- 
quired to  redeem  gold  certificates  outstanding.  Free  gold  in- 
cludes the  $150,000,000  gold  reserve. 

Free  list.  The  free  list  on  the  New  York  Stock  Exchange 
has  been  abolished. 

Formerly  business  was  begun  with  the  calling  of  a  regular 
list  of  stocks  and  bonds  and  bids  and  offers  were  made  as  the 
names  of  the  securities  were  called  out.  This  list  comprised 
the  stocks  and  bonds  actively  dealt  in.  After  this  regular  call 
if  there  was  a  request  for  the  recalling  of  a  stock  or  bond  the 
request  involved  the  payment  of  a  fee  of  12  1-2  cents. 

Then  there  was  a  free  list  composed  of  inactive  stocks  and 
bonds.  The  names  of  these  securities  were  called  on  request 
and  no  fee  was  exacted  for  calling. 

Free  market.  A  free  market  in  stocks  is  one  in  which  secu- 
rities are  freely  dealt  in ;  it  is  the  same  in  commodities. 

Free  of  average  or  free  of  particular  average.  An  insurance 
of  goods  shipped  whereby  the  owner  is  to  be  "free  of  loss"  or 
saved  from  loss  in  case  of  damage. 

Free  on  board.  Grain  or  goods  delivered  free  on  board  car 
or  vessel ;  that  is,  with  all  charges  paid  or  included  up  to  that 
time. 

Free  overside.  A  mercantile  term ;  goods  sold  free  overside 
are  sold  free  out  of  the  vessel  (free  of  charges  up  to  the  time  of 
discharge  from  the  vessel).     The  seller's  responsibility  ceases 


SMITH'S  FINANCIAL  DICTIONARY.  217 

as  soon  as  the  goods  have  left  the  vessel.  Ex-ship  or  ex- 
■steamer  has  the  same  meaning. 

Free  port.  A  port  free  for  trading  vessels  of  all  nations  or 
.a  port  where  no  duties  are  levied  on  articles  of  commerce. 

Freight.  Goods  or  materials  transported  by  a  carrying  com- 
pany. The  term  is  also  sometimes  applied  to  the  charges  im- 
posed for  transporting  the  goods  or  materials. 

Freight  density.  A  term  used  in  railroad  accounting,  mean- 
ing the  result  obtained  when  the  number  of  tons  carried  one 
mile  is  divided  by  the  number  of  miles  of  road  operated. 

Freight  miles  or  freight  mileage.  A  term  used  in  railroad 
accounting,  meaning  the  number  of  tons  of  freight  carried  one 
mile. 

Freight  traffic.  Freight  (merchandise,  etc.)  transported  by 
a  railroad  or  other  carrying  line. 

Frozen  out.  Excluded  or  shut  out.  For  instance,  if  the 
majority  interest  in  a  corporation  so  adjusts  matters  as  to 
control  to  the  exclusion  of  the  minority  interest  the  minority 
interest  is  said  to  have  been  frozen  out. 

Likewise,  if  a  member  of  a  board  of  directors  is  objection- 
able to  the  other  members  and  their  combined  opposition  to 
him  in  the  affairs  of  the  concern  impels  him  to  retire  from  the 
board  he  is  said  to  have  been  frozen  out. 

Full-paid  stock.  That  which  subscribers  (persons  who  sub- 
scribe for  the  stock)  have  paid  for  in  full. 

Full  stock.  Stock  of  the  face  value  of  $100;  half-stock  is 
of  the  face  value  of  $50  and  quarter-stock  is  of  the  face  value 
of  $25. 

Fund.  A  sum  of  money  accumulated  or  set  aside,  usually 
for  a  special  purpose,  as  a  sinking  fund   or  redemption  fund. 

Also  see  Funds. 

Funded.  Converted  into  a  permanent  loan,  as  into  bonds 
or  some  other  security,  and  payable  at  a  future  time,  with  in- 
terest. 

Funded  debt.  General  outstanding  debts  which  have  been 
converted  into  bonds   or  annuities. 

Funded  debt  is  a  term  for  the  liabilities  of  the  British  gov- 
ernment such  as  have  been  issued  in  the  form  of  permanent  or 
long-dated  securities,  as  distinguished  from  the  floating  debt. 


2i8  SMITH'S  FINANCIAL  DICTIONARY. 

which  is  in  the  form  of  Exchequer  bonds  and  Treasury  bills 
and  is  regarded  as  temporary.  The  distinction  is  not  clearly 
drawn.  Experts  differed,  for  example,  as  to  whether  the  na- 
tional war  loan  issued  in  1900  and  repayable  in  1910  should 
be  regarded  as  part  of  the  funded  or  the  floating  debt. 

Fund  holder.  An  investor  in  public  funds ;  that  is,  a  holder 
of  government  securities. 

Funding.  The  act  or  process  of  changing  a  floating  or  un- 
secured debt  into  a  permanent  loan. 

Funding  system.  A  system  of  public  finance  that  converts 
floating  indebtedness  into  a  funded    or  fixed  debt. 

Fund-monger.  A  dealer  in  public  funds,  that  is,  in  govern- 
ment securities.     The  term  is  not  a  common  one. 

Funds.  This  term  includes  not  only  cash  but  checks, 
drafts  and  other  written  or  printed  instruments  which  can 
quickly  be  converted  into  cash. 

Abroad  the  term  refers  to  the  securities  (as  bonds)  repre- 
senting government  debts. 

Future.  A  contract  the  fulfilment  of  which  is  not  required 
until  a  specified  time  in  the  future.  Most  of  the  dealings  in 
grain,  especially  wheat,  corn  and  oats,  and  in  cotton  and 
cofifee,  are  in  futures.  A  future  is  designated  by  the  name  of 
the  month  in  which  it  matures.  For  instance,  July  grain, 
cotton  or  coffee  sold  in  January  (or  in  any  month  before  July) 
is  deliverable  in  July. 

Future  delivery.     Delivery  at  a  future  time. 

Future  quotation.  The  price  for  delivery  at  a  specified 
future  date. 


SMITH'S  FINANCIAL  DICTIONARY.  219 


G 


Gage.     To  pledge  personal  property  as  security  for  a  debt. 

Gage  plan.  This  term  originated  in  a  proposition  for  an 
asset  currency  contained  in  the  annual  report  of  the  Secretary 
of  the  Treasury  (Lyman  J.  Gage)  transmitted  to  Congress 
December  4,  1901. 

An  amendment  to  the  law  was  proposed  whereby  a  national 
bank  on  the  deposit  with  the  Treasurer  of  the  United  States 
of  30  per  cent  of  its  capital  in  the  form  of  government  bonds 
at  their  par  value  and  20  per  cent  of  its  capital  in  United 
States  legal  tender  notes  might  issue  its  circulating  notes  to 
an  amount  equal  to  its  paid-in  and  unimpaired  capital.  The 
remainder  of  the  security  for  the  notes  was  to  rest  on  the 
assets  of  the  bank.  In  addition  the  bank  was  to  pay  semi- 
annually to  the  Treasurer  of  the  United  States,  in  trust,  an 
amount  equal  to  1-8  of  i  per  cent  of  its  capital  stock,  such 
payment  to  form  part  of  a  general  guarantee  fund  for  the  pro- 
tection (prompt  redemption)  of  the  notes  of  any  bank  which 
by  reason  of  insolvency  should  become  unable  to  pay  its  notes 
on  demand. 

Garbling.  The  practise  of  money  dealers  of  retaining  new 
coins  of  full  weight  for  export  or  melting  and  returning  the 
light-weight  ones  to  circulation. 

Garnishee.  A  person  who  holds  money  or  property  be- 
longing to  another  which  has  been  attached  for  debt. 

Garnishment.  Attachment  for  debt  of  money  or  property 
while  in  the  hands  of  a  third  party.  In  Massachusetts  this 
proceeding  is  called  trustee  process. 

GB.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  gold  bonds  (bonds,  the  principal  of  and  interest  on 
which  are  payable  in  gold). 

General  account.  In  a  bank  a  general  account  is  an  account 
which  is  for  general  or  miscellaneous  purposes  to  which 
credits  are  added  and  against  which  checks  are  drawn  in  the 
ordinary  course ;  a  special  account  is  one  created  for  a  special 
purpose. 


220  SMITH'S  FINANCIAL  DICTIONARY. 

General  agent.  A  person  appointed  to  act  for  another  in 
all  his  afifairs   or  in  all  affairs  of  a  particular  class. 

General  balance.  The  balance  of  a  collective  account  or  of 
all  accounts. 

General  court.  The  half-yearly  meeting  of  the  proprietors 
(stockholders)  of  the  Bank  of  England  is  called  the  general 
court. 

General  damages.  Such  damages  as  result  from  a  wrong  by 
implication  of  law. 

General  deposit.  A  general  deposit  with  a  bank  is  a  de- 
posit received  and  placed  with  the  funds  of  the  bank  to  be 
loaned  to  customers  and  used  in  the  general  business  with 
other  funds  of  the  bank.  A  special  deposit  is  a  deposit  for 
safe  keeping;  to  be  kept  as  received  until  called  for. 

General  indorsement.  An  indorsement  in  blank — that  is, 
by  signing  the  name  of  the  indorser  simply,  without  transfer- 
ring the  paper  to  some  particular  party. 

General  mortgage.  A  mortgage  covering  all  the  stationary 
property  of  a  company ;  same  as  blanket  mortgage. 

General  mortgage  bond.  A  bond  issued  under  a  general 
mortgage. 

General  partner.  An  active  partner;  one  who  participates 
in  profits   and  is  liable  for  debts. 

General  power  of  attorney.  Written  authority  to  act  for 
another  in  matters  generally. 

General  stock.  Common  or  ordinary  stock ;  see  Common 
stock. 

George  Smith's  money.  The  name  applied  to  a  circulating 
medium  (in  this  case  a  substitute  for  money)  devised  by 
George  Smith,  who  came  to  the  United  States  from  Scotland 
in  1834  and  who  died  in  London  in  1899  i^  l^is  ninety-second 
year,  leaving  a  fortune  estimated  at  £10,000,000  (about  $50,- 
000,000) , 

In  1839  Smith  procured  the  incorporation  of  the  Wisconsin 
Marine  and  Fire  Insurance  Company  and  made  himself  its 
president.  The  company  did  not  and  it  was  not  Smith's  in- 
tention that  it  should  do  much  of  an  insurance  business.  It 
proceeded  to  issue  what  were  termed  certificates  of  deposit  in 
denoniiiKitions  of  $t   and  tipward  in  similitude  of  bank  bills. 


SMITH'S  FINANCIAL  DICTIONARY.  221 

These  certificates  said  on  their  face  that  the  amount  of  them 
had  been  deposited  with  tlie  company  and  that  they  were 
payable  to  the  bearer  on  demand. 

The  whole  Northwest  had  been  denuded  of  currency  by  the 
financial  disturbance  of  1837  and  there  was  ready  employment 
for  George  Smith's  money,  which,  by  reason  of  the  fact  that  it 
was  promptly  redeemed  on  presentation,  passed  everywhere 
without  discount,  or  in  other  words,  at  its  full  face  value.  It 
was  wildcat  or  red  dog  money,  but  it  was  good. 

Ghost.  A  colloquialism  used  to  describe  a  broken  down 
speculator  who  still  haunts  Wall  Street. 

Gilt-edge  securities.     Those  of  superior  merit. 

Give  on.  London  Stock  Exchange  term ;  a  broker  or  dealer 
who  has  bought  a  stock  and  does  not  wish  to  take  it  up  says  he 
will  give  on  it  when  he  is  willing  to  pay  a  contango  (carrying- 
over  charge)  for  the  privilege  of  continuing  his  bargain  (con- 
tract) to  the  succeeding  fortnightly  settlement ;  a  broker  or 
dealer  who  has  sold  a  stock  and  does  not  wish  to  deliver  it 
says  he  will  take  it  in  when  he  is  willing  to  borrow  the  stock 
and  either  receive  a  contango  or,  if  the  stock  is  much  oversold, 
pay  a  backwardation  for  the  privilege  of  postponing  delivery  to 
the  succeeding  fortnightly  settlement. 

Giver  on.  London  Stock  Exchange  term  for  an  operator 
who  has  bought  stock  which  he  does  not  wish  to  pay  for  and 
take  up  and  so  gives  a  contango  rate  to  a  money  lender  who 
will  take  the  stock  up  for  him;  or  the  term  applies  to  a  bear 
who  is  short  of  the  stock  and  wants  to  borrow  the  stock  for 
delivery.  The  effect  of  this  operation  is  that  the  buyer  con- 
tinues his  bargain  (contract)  to  the  next  fortnightly  settle- 
ment. When  the  stock  is  much  oversold  the  buyer  who  lends 
the  stock  receives  a  premium  from  the  seller  for  postpone- 
ment of  delivery.     This  premium  is  called  backwardation. 

Giving  up.  The  broker  in  stocks  who  executes  an  order  for 
another  broker  and  whose  connection  with  the  transaction 
ends  there  "gives  up"  to  the  broker  to  whom  he  sells  or  from 
whom  he  buys  the  name  of  the  broker  (or  brokerage  firm)  for 
whom  he  is  acting,  which  broker  (or  firm)  completes  the  trans- 
action. 


222  SMITH'S  FINANCIAL  DICTIONARY. 

GM.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  general  mortgage. 

G.  M.  B.  These  letters  stand  for  good  merchantable  brand ; 
this  trade  term  is  more  commonly  used  in  Great  Britain  than 
in  the  United  States. 

GNT.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  land  grant,  as  land  grant  bonds. 

G.  O.  B.     These  letters  stand  for  good  ordinary  brand. 

Gold,  Gold  was  probably  the  first  metal  known  and  the 
original  sources  were  in  Asia  and  Africa.  Gold  was  worth 
13  1-3  times  as  much  as  silver  in  ancient  Egypt;  10  times  as 
much  as  silver  in  Greece  and  Rome  before  the  Christian  era, 
and  7  1-2  times  as  much  when  Caesar  returned  to  Rome. 

The  value  of  an  ounce  of  fine  (pure)  gold  is  $20.67.2 ;  the 
value  of'  an  ounce  of  gold  of  the  standard  of  fineness  of  the 
United  States  government  (nine-tenths  fine  and  one-tenth 
alloy)  is  $18.60.5. 

Gold  bank.     See  National  gold  bank. 

Gold  baf.  Means  in  bullion  dealings  a  bar  (ingot)  of  pure 
gold.  Bars  made  by  the  government  are  called  government 
bars  or  government  assay  bars ;  bars  made  by  private  con- 
cerns are  called  commercial  bars. 

Gold  basis.  Exists  when  values  are  based  on  gold  money. 
Gold  has  a  fixed  value ;  it  is  the  basis  or  standard  of  commer- 
cial value  the  world  over. 

Gold  bond.  A  bond  specifically  payable,  principal  and  in- 
terest, in  gold. 

Gold  brick.  A  colloquial  term  or  synonym  for  swindle. 
The  term  is  derived  from  the  fraudulent  operation  in  which  a 
brick  or  bar  of  base  metal  covered  with  gold  is  sold  as  a 
brick  or  bar  that  is  all  gold.  The  expression  "buying  a  gold 
brick"  means  buying  something  at  a  supposedly  low  price 
which    as  a  fact    is  worthless. 

Gold-bug.  Political  nickname  for  an  advocate  of  the  single 
gold  monetary  standard. 

Gold  certificate.  A  certificate  issued  against  a  correspond- 
ing amount  of  gold  (coin  or  bars)  held  in  the  Treasury. 

Gold  certificates  are  issued  in  denominations  of  $20,  50,  $100, 
$500,  $1,000,  $5,000,  $10,000.     The  issue  of  them  is  unlimited, 


SMITH'S  FINANCIAL  DICTIONARY.  223 

except  that  it  is  suspended  when  the  gold  reserve  in  the  Treas- 
ury falls  below  $100,000,000.  Gold  certificates  are  exchange- 
able at  the  Treasury  for  gold  coin  or  any  other  money. 

Gold  certificates  are  not  legal  tender,  but  are  receivable  for 
customs,  taxes  and  all  public  dues  and  when  so  received  may 
be  reissued  ;  they  are  also  available  for  the  reserves  of  na- 
tional banks.  They  were  issued  payable  to  bearer  only  until 
1888,  when  a  series  payable  to  order  was  also  provided  by  the 
Treasury  Department,  but  in  denominations  of  $5,000  and 
$10,000  only.  Gold  certificates  are,  in  effect,  merely  ware- 
house receipts. 

Gold  coins.  Double-eagle  ($20)  ;  weight,  516  grains;  thick- 
ness, .077  inch;  diameter,  1.35  inch.  Eagle  ($10)  ;  weight,  258 
grains;  thickness,  .060  inch;  diameter,  1.05  inch.  Half-eagle 
($5);  weight,  129  grains;  thickness,  .046  inch;  diameter,  .85 
inch.  Quarter-eagle  ($2.50);  weight,  .64.5  grains;  thickness, 
.034  inch ;  diameter,  .75  inch. 

The  coinage  of  gold  dollar  and  gold  three-dollar  pieces  was 
suspended  by  the  act  of  September  26,  1890. 

Gold  dollar.  A  gold  piece  of  the  United  States  weighing 
25.8  grains,  nine-tenths  fine  ;  that  is,  nine-tenths  gold  and  one- 
tenth  alloy ;  no  longer  coined. 

Gold  export  point.  The  gold  export  point  in  foreign  ex- 
change is  reached  when  the  rate  in  one  country  of  exchange  on 
another  country  has  advanced  to  the  point  where  it  is  cheaper 
to  ship  the  actual  gold  than  to  buy  exchange  for  the  purpose 
of  making  a  remittance  from  the  first  country  to  the  second 
country.  For  additional  information  see  Gold  exports  and 
imports. 

Gold  exports  and  imports.  If  in  the  course  of  its  dealings 
with  Europe  a  balance  to  the  credit  of  America  accumulates 
this  balance  is  settled  in  due  time  either  by  a  reversal 
of  the  order  of  things  or  by  Europe  sending  gold  to  America 
to  make  up  the  difference.  In  case  there  is  a  balance  in  favor 
of  Europe  and  it  cannot  be  settled  in  any  other  way  then  gold 
has  to  be  sent  from  America  to  Europe. 

The  dealings  between  America  and  Europe  which  bring 
about  a  balance  in  favor  of  America  and  against  Europe  or 
in    favor  of   Europe   and   against   America     include   not   only 


?24  SMITH'S  FINANCIAL  DICTIONARY. 


commercial  exports  and  imports,  but  also  financial  transac- 
tions, such  as  the  sale  by  America  to  Europe  and  the  purchase 
by  America  from  Europe  of  securities.  America  has  in  the 
course  of  years  sold  vast  amounts  of  securities  to  Europe,  but 
many  of  these  have  been  resold  to  America.  In  recent  years 
America  has  been  a  considerable  purchaser  of  European  secu- 
rities, but  many  of  these  have  been  resold  to  Europe.  Ameri- 
can travelers  spend  large  sums  in  Europe,  but  European  trav- 
elers spend  only  partially  offsetting  sums  in  America.  The 
carrying  trade  between  America  and  Europe  is  largely  by 
vessels  owned  in  Europe  and  therefore  the  ocean  freight 
charges  constitute  an  important  element  in  favor  of  Europe  in 
dealings  between  America  and  Europe.  These  things,  with 
others,  like  individual  remittances  from  America  to  Europe 
and  from  Europe  to  America,  are  combined  in  creating  a  bal- 
ance in  favor  of  or  against  America. 

Whether  gold  comes  from  or  goes  to  Europe  depends  di- 
rectly on  the  state  of  foreign  exchange.  If  bills  of  exchange 
(drafts)  on  Europe  are  in  excessive  supply  as  a  consequence 
of  America's  having  an  unusually  large  credit  balance  in 
Europe  the  bills  fall  below  par — that  is,  they  fall  in  their 
marketable  value  below  their  actual  money  value.  If  they  fall 
enough  they  can  be  employed  to  bring  gold  from  Europe. 
Banks  or  bankers  who  are  in  the  exchange  business  buy  the 
bills  at  their  depreciated  value  and  buy  gold  in  Europe  with 
them  at  their  full  value.  They  must,  however,  have  fallen 
enough  to  cover  the  expense  of  packing,  freight,  insurance  and 
loss  of  interest  on  the  gold  while  the  gold  is  in  transit.  These 
items  figure  up  something  like  3-8  of  i  per  cent  of  the  value 
of  the  gold.  Therefore,  any  material  discount  on  exchange 
beyond  this  amount  will  permit  the  importation  of  gold  at  a 
profit. 

When  gold  is  exported  the  situation  is  reversed.  Then,  ex- 
change must  command  a  premium — be  selling  above  par. 
Banks  or  bankers  sell  bills  of  exchange  or  drafts  at  a  premium 
to  merchants  or  others  who  have  remittances  to  make  to 
Europe  and  buy  gold  at  its  face  value  to  ship  to  Europe  to 
meet  the  drafts — to  pay  them.  The  premium  on  the  drafts 
must  be  sufiicient  to  defray  the  expenses  connected  with  the 


SMITH'S  FINANCIAL  DICTIONARY.  225 

exportation  of  the  gold   and  something  besides  for  profit  on  the 
operation. 

Gold  also  conies  to  America  when  the  foreign  owners  can 
find  more  profitable  employment  for  it  here  than  in  Europe. 
In  such  cases  the  American  borrowers  pay  interest  on  it  and 
a  commission  or  extra  charge  besides.  Gold  likewise  goes 
from  America  to  Europe  when  more  profitable  use  can  be 
found  for  it  abroad  than  here. 

Under  ordinary  circumstances  gold  flows  from  London  to 
New  York  when  demand  sterling  exchange  is  quoted  in  New 
York  at  4.84 — 4.84  is,  in  other  words,  the  normal  gold  import 
point.  Likewise,  under  ordinary  circumstances  gold  flows 
from  New  York  to  London  when  demand  sterling  exchange  is- 
quoted  in  New  York  at  4.89 — 4.89  is,  in  other  words,  the 
normal  gold  export  point. 

The  term  specie  point  is  sometimes  used  instead  of  gold 
point,  but  gold  point  is  the  term  more  commonly  employed. 
Literally,  specie  means  any  kind  of  metal  money,  while  there 
is  but  one  meaning  to  gold. 

The  tendency,  usually,  is  for  gold  to  flow  from  or  out  of  the 
United  States  to  Europe  in  the  period  from  December  to  June 
and  from  Europe  to  the  United  States  in  the  period  from  July 
to  November.  The  balance  of  trade  is  normally  against  the 
United  States  from  December  to  June.  From  July  to  Decem- 
ber the  reverse  is  the  case  as  the  result  of  the  exportation  of 
the  new  crops  of  grain  and  cotton.  For  another  thing,  in  this 
latter  period  interest  rates  are  high  as  a  consequence  of  the 
large  requirements  of  money  to  pay  the  growers  for  their  grain 
and  cotton  and  high  interest  rates  are  effective  in  facilitating 
the  importation  of  gold  from  Europe. 

The  Bank  of  England,  the  same  as  all  other  buyers  and 
sellers,  buys  and  sells  United  States  gold  coins  by  weight. 
The  value  of  United  States  coins  in  English  money  is  76 
shillings  4  1-2  pence  per  ounce.  The  buying  price  of  the  bank 
in  ordinary  circumstances — the  price  which  it  pays — is  76 
shillings  3  1-2  pence;  its  selling  price  is  3  to  3  1-2  pence  higher 
than  its  buying  price.  If  it  desires  to  attract  to  itself  United 
States  coins  it  may  raise  its  buyingprice  above  y6  shillings  41-2 
pence ;  and  if  it  desires  to  prevent  the  withdrawal  of  American 


226  SMITH'S  FINANCIAL  DICTIONARY. 

gold  coins  from  its  vaults  it  may  raise  its  selling  price  to  any 
point  necessary  to  accomplish  its  purpose.  It  is  the  practise 
to  speak  of  the  buying  or  the  selling  price  of  the  Bank  of  Eng- 
land for  United  States  gold  coins  as  its  buying  price  or  selling 
price  for  American  eagles,  although  the  coins  actually  bought 
or  sold  may  be  double-eagles  ($20  pieces),  eagles  ($10  pieces), 
half-eagles  ($5  pieces)    or  quarter-eagles  ($2.50  pieces). 

In  every  country  the  coins  of  another  country  are  bought 
and  sold  according  to  weight  and  fineness.  British  gold  coins 
are  eleven-twelfths  fine,  whereas  United  States  gold  coins  are 
nine-tenths  fine — that  is,  nine-tenths  pure  gold  and  one-tenth 
alloy,  the  alloy  being  composed  of  nine  parts  copper  and  one 
part  silver.  The  gold  coins  of  France  and  Germany  and 
of  most  other  gold-using  countries    are  nine-tenths  fine. 

The  Bank  of  England  usually  has  a  supply  of  United  States 
coin  which  it  will  sell,  but  it  fixes  its  own  price,  which  it 
raises  or  lowers  according  to  the  condition  of  its  gold  reserve. 
The  Bank  of  France,  which  also  usually  has  a  supply  of  United 
States  coin,  employs  the  same  system  in  selling  it.  A  still 
more  effective  method  employed  by  the  Bank  of  England,  the 
Bank  of  France  and  other  great  European  banks  to  protect 
their  gold  reserves   is  the  raising  of  their  rates  of  discount. 

In  a  triangular  operation  in  gold  the  gold  goes  from  the 
place  where  exchange  on  the  other  two  places  is  at  a  premium 
and  it  goes  to  the  one  of  these  two  places  where  exchange  on 
the  other  is  at  a  discount. 

Thus,  if  exchange  on  both  New  York  and  Paris  is  at  a  pre- 
mium in  London,  while  in  New  York  exchange  on  Paris  is  at  a 
discount,  London  will  sell  exchange  on  Paris,  with  the  proceeds 
buy  and  ship  gold  to  New  York,  with  the  gold  buy  in  New 
York  exchange  on  Paris    and  with  this  exchange  cover  (pay) 


'&> 


in  Paris  the  exchange  on  Paris  which  it  (London)  originally 
sold. 

Likewise,  if  exchange  on  both  London  and  Paris  is  at  a 
premium  in  New  York,  while  in  Paris  exchange  on  London 
is  at  a  discount,  New  York  will  sell  exchange  on  London,  with 
the  proceeds  buy  and  ship  gold  to  Paris,  with  the  gold  buy  in 
J^aris   exchange   on    London     and    with    this    exchange   cover 


SMITH'S  FINANCIAL  DICTIONARY.  227 

(pay)    in    London   the   exchange   on    London   which   it    (New 
York)  originally  sold. 

The  profit  in  the  operation  is  the  premium  on  the  exchange 
originally  sold  and  the  discount  on  the  exchange  subsequently 
bought  for  use  in  cover  (in  payment)  of  the  exchange  sold, 
Vess  the  cost  of  shipping  the  gold. 

Gold  import  point.  The  gold  import  point  is  reached  when 
the  rate  in  one  country  of  exchange  on  another  country  has 
declined  to  a  point  where  it  is  profitable  to  buy  exchange  on 
another  country  and  use  it  to  buy  gold  in  the  second  country 
(the  country  where  the  exchange  is  payable)  for  importation 
to  the  first  country  (the  country  in  which  the  exchange  is  pur- 
chased). For  additional  information  see  Gold  exports  and 
imports. 

Gold  imports.     See  Gold  exports   and  imports. 

Gold  movement.  The  export  or  import  movement  of  gold. 
See  Gold  exports   and  imports. 

Lrold  point.  Foreign  exchange  is  said  to  be  at  the  gold  point 
when  it  is  at  the  point  which  permits  the  importation  of  gold ; 
likewise  foreign  exchange  is  said  to  be  at  the  gold  point  when 
it  is  at  the  point  which  permits  the  exportation  of  gold. 

Specifically,  the  gold  import  point  is  reached  wdien  the  rate 
in  one  country  of  exchange  on  another  country  has  declined 
to  a  point  where  it  is  profitable  to  buy  exchange  on  another 
country  and  use  it  to  buy  gold  in  the  second  country  (the 
country  where  the  exchange  is  payable)  for  importation  to 
the  first  country  (the  country  in  which  the  exchange  is  pur- 
chased). 

Specifically,  likewise,  the  gold  export  point  is  reached  when 
the  rate  in  one  country  of  exchange  on  another  country  has 
advanced  to  the  point  where  it  is  cheaper  to  ship  the  actual 
gold  than  to  buy  exchange  for  the  purpose  of  making  a  re- 
mittance. 

For  additional  information  see  Gold  exports    and  imports. 

Gold  premium.  The  amount  in  excess  of  its  face  value  that 
gold  money  (or  its  equivalent  in  bars)  commands  (is  worth) 
in  another  kind  of  money  for  which  it  is  exchanged.  Thus,  if 
100  gold  dollars  cost  200  paper  dollars   gold  money  is  at  a  pre- 


228  SMITH'S  FINANCIAL  DICTIONARY. 

mium  of  lOO  per  cent  and  paper  money  is  at  a  discount  of  50 
per  cent. 

A  country  whose  paper  or  silver  money  is  not  exchange- 
able on  equal  terms  for  gold  has  a  depreciated  currency. 

Gold  reserve.  The  fund  in  gold  set  aside  in.  the  United 
States  Treasury  for  the  redemption  of  United  States  notes 
(greenbacks)  ;  established  at  $100,000,000  by  act  of  Congress, 
in-  1882,  which  directed  the  Secretary  of  the  Treasury  to  sus- 
pend the  issue  of  gold  certificates  when  the  amount  of  gold 
coin  and  bullion  in  the  Treasury  available  for  redemption  of 
United  States  notes  should  fall  below  that  sum ;  increased  to 
$150,000,000  by  the  act  of  March  14,  1900, 

Gold  standard.  Technically,  the  gold  standard  exists  where 
it  is  by  law  enacted  that  gold  shall  be  the  measure  of  value. 
Practically,  gold  is  the  universal  measure  of  value,  for  in  coun- 
tries where  a  double  standard  of  value  prevails  by  law  silver 
coinage  is  limited  and  silver  is  used  in  the  capacity  of  repre- 
sentative money.  It  is  a  legal  tender  for  debts,  but  does  not 
pass  current  at  its  bullion  value,  being  sustained  at  par  with 
gold  by  the  limitation  on  its  use  and  the  fiat  of  the  govern- 
ment which  coins  it.  In  silver  standard  countries  domestic 
trade  is  based  on  silver  at  its  bullion  value,  but  that  value  in 
turn  is  based  on  the  outside  commerce  of  the  country  which  is 
estimated  in  gold.  So,  it  may  be  said  that  gold  is  the  standard 
of  the  world,  having  been  adopted  as  such  by  law  as  well  as 
by  custom  in  all  the  leading  commercial  nations  and  being 
accepted  in  fact  by  every  other  country. 

Gold  standard  act.  The  name  commonly  applied  to  the  act 
of  March  14,  1900,  which  declares  that  "the  dollar  consisting 
of  twenty-five  and  eight-tenths  grains  of  gold  nine-tenths  fine 
*  *  *  shall  be  the  standard  unit  of  value,  and  all  forms  of 
money  issued  or  coined  by  the  United  States  shall  be  main- 
tained at  a  parity  of  value  with  this  standard     *     *     *." 

The  act,  officially  designated  as  "Currency  act,  approved 
March  14,  1900,"  is  in  full  as  follows : 

A.n  Act  to  define  and  fix  the  standard  of  value,  to  maintain  the  parity  of  all 
forms  of  money  issued  or  coined  by  the  United  States,  to  refund  the 
public  debt,  and  for  other  purposes. 

Be   it   enacted   by   the  Senate   and   House   of  Representatives   of   the 


SMITH'S  FINANCIAL  DICTIONARY.  229 

United  States  of  America  in  Congress  assembled.  That  the  dollar  coiit 
sisting  of  twenty-five  and  eight-tenths  grains  of  gold  nine-tenths  fine,  as 
established  by  section  thirty-five  hundred  and  eleven  of  the  Revised  Stat- 
utes of  the  United  States,  shall  be  the  standard  unit  of  value,  and  all 
forms  of  money  issued  or  coined  by  the  United  States  shall  be  maintained 
at  a  parity  of  value  with  this  standard,  and  it  shall  be  the  duty  of  the  Sec- 
retary of  the  Treasury  to  maintain  such  parity. 

Sec.  2.  That  United  States  notes  and  Treasury  notes  issued  under 
the  Act  of  July  fourteenth,  eighteen  hundred  and  ninety,  when  presented 
to  thv-  Treasury  for  redempvion,  shall  be  redeemed  in  gold  com  of  the 
standard  fixed  in  the  first  section  of  tiiis  Act,  and  in  order  to  secure  the 
prompt  and  certain  redemption  of  such  notis  as  herein  provided  it  shall 
be  the  duty  of  the  Secretary  of  the  Treasury  to  set  apart  in  the  Treasury  a 
reserve  f)<nd  of  one  hundred  and  fifty  million  dollars  m  gold  coin  and 
bullion,  which  fund  shall  be  used  for  such  redemption  purposes  only,  and 
whenever  and  as  often  as  any  of  said  notes  shall  be  redeemed  from  said 
fund  it  shall  be  the  duiy  of  the  Secretary  of  the  Treasury  to  use  said  notej 
'JO  redeemed  to  restore  and  maintain  such  reserve  fund  in  the  manner  fol- 
lowing, to  wit :  First,  by  exchanging  the  notes  so  redeemed  for  any  gold 
coin  in  the  general  fund  of  the  Treasury ;  second,  by  accepting  deposits  cf 
gold  coin  at  the  Treasury  or  at  any  subtreasury  in  exchange  for  the  United 
States  notes  so  redeemed;  third,  by  procuring  gold  coin  by  the  use  of  said 
notes,  in  accordance  with  the  provisions  of  section  thirty-Siven  hundred  of 
the  Revised  Statutes  of  the  United  States.  If  the  Secrelary  of  the  Treas- 
ury is  unable  to  restore  and  maintain  the  gold  coin  in  the  reserve  fund  by 
the  foregoing  methods,  and  the  amount  of  such  gold  coin  and  bullion  in 
said  fund  shall  at  any  time  fall  below  one  hundred  million  dollars,  then  iv 
shall  be  his  duty  to  restore  the  same  to  the  maximum  sum  of  one  hundred 
and  fifty  million  dollars  by  borrowing  money  on  the  credit  of  the  United 
States,  and  for  the  debt  thus  incurred  to  issue  and  sell  coupon  or  regis- 
tered bonds  of  the  United  States,  in  such  form  as  he  may  prescribe,  111 
denominations  of  fifty  dollars  or  any  multiple  thereof,  bearing  interest  at 
the  rate  of  not  exceeding  three  per  centum  per  annum,  payable  quarterly, 
such  bonds  to  be  payable  at  the  pleasure  of  the  United  States  after  one  year 
from  the  date  of  their  issue,  and  to  be  payable,  principal  and  interest,  in 
gold  coin  of  the  present  standard  of  value,  and  to  be  exempt  from  the 
paj'inent  of  all  taxes  or  duties  of  the  United  States,  as  well  as  from  taxa- 
tion in  any  form  by  or  under  State,  municipal,  or  local  authority;  and  the 
gold  coin  received  from  the  sale  of  said  bonds  shall  first  be  covered  into 
<iie  general  fund  of  the  Treasury  and  then  exchanged,  in  the  manner  here- 
inbefore provided,  for  an  equal  amount  of  the  notes  redeemed  and  held  for 
exchange,  and  the  Secretary  of  the  Treasury  may,  in  his  discretion,  use 
said  notes  in  exchange  for  gold,  or  to  purchase  or  redeem  any  bonds  of  the 
United  States,  or  for  any  other  lawful  purpose  the  public  interests  may 
require,  except  that  they  shall  not  be  used  to  meet  deficiencies  in  the  cur- 
rent revenues.  That  L'nited  States  notes  when  redeemed  in  accordance 
with  the  provisions  of  this  section  shall  be  reissued,  but  shall  be  held  in 


^30  SMITH'S  FINANCIAL  DICTIONARY. 

tne  reserve  fund  until  exchanged  fov  gold,  as  herein  provided;  and  the 
gold  coin  and  bullion  in  the  reserve  fund,  together  with  the  redeemed  notes 
held  for  use  as  provided  in  this  section,  shall  at  no  time  exceed  the  maxi- 
mum sum  of  one  hundred  and  fifty  million  dollars. 

Sec.  3.  That  nothing  contained  in  this  Act  shall  be  construed  to  afif^ct 
the  legal-tender  quality  as  now  provided  by  law  of  the  silver  dollar,  or  of 
.^ny  other  money  coined  or  issued  by  the  United  States. 

Sec.  4.  That  there  be  established  in  the  Treasury  Department,  as  a 
part  oi  the  office  of  the  Treasurer  of  the  United  States,  divisions  to  be 
designated  and  known  as  the  division  of  issue  and  the  division  of  redemp- 
tion, to  which  shall  be  assigned,  respectively,  under  such  regulations  ay 
the  Secretary  of  the  Treasury  may  approve,  all  records  and  accounts  rela- 
ting to  th-  issue  and  redemption  of  United  States  notes,  gold  certificatf.s. 
sliver  certificates,  and  currency  certificates.  There  shall  be  transferred 
from  the  accounts  of  the.  general  fund  of  the  Treasury  of  the  United 
States,  and  tciken  up  on  the  books  of  said  divisions,  respectively,  accounts 
relating  to  the  reserve  fund  for  the  redemption  of  United  States  notes  and 
Treasury  notes,  the 'gold  coin  !ield  against  outstandmg  gold  certificates,  the 
United  States  notes  held  against  outstanding  currency  certificates,  and  the 
oilver  dollars  held  against  outstanding  silver  certificates,  and  each  of  the 
funds  represented  by  these  accounts  shall  be  used  for  the  redemption  of  the 
notes  ?nd  certificates  for  which  they  are  respectively  pledged,  and  shall  be 
used  for  no  other  purpose,  the  same  being  held  as  trust  funds. 

Sec.  5.  That  it  shall  be  the  duty  of  the  Secretary  of  the  Treasury,  as 
fast  as  standard  silver  dollars  are  coined  under  the  provisions  of  the  Acts 
of  July  fourteenth,  eighteen  hundred  and  ninety,  and  June  thirteenth,  eigh- 
teen hundred  and  ninety-eight,  from  bullion  purchased  under  the  Act  of 
July  fourteenth,  eighteen  hundred  and  ninety,  to  retire  and  cancel  an  equal 
amount  of  Treasury  notes  whenever  received  into  the  Treasury,  either  by 
exchange  in  accordance  with  the  provisions  of  this  Act  or  in  the  ordinary 
course  of  business,  and  upon  the  cancellation  of  Treasury  notes  silver  cer- 
tificates shall  be  issued  against  the  silver  dollars  so  coined. 

Sec.  6.  That  the  Secretary  of  the  Treasury  is  hereby  authorized  and 
directed  to  receive  deposits  of  gold  coin  with  the  Treasurer  or  any  assist- 
ant treasurer  of  the  United  States,  in  sums  of  not  less  than  twenty  dollars, 
and  to  issue  gold  certificates  therefor  in  denominations  of  not  less  thdu 
twenty  dollars,  and  the  coin  so  deposited  shall  be  retained  in  the  Treasure 
and  held  for  the  payment  of  such  certificates  on  demand,  and  used  for  no 
other  purpose.  Such  certificates  shall  be  receivable  for  customs,  taxes,  and 
all  public  dues,  and  when  so  received  may  be  reissued,  and  when  held  by 
any  national  banking  association  may  be  counted  as  a  part  of  its  lawful 
reserve.  Provided,  That  whenever  and  so  long  as  the  gold  coin  held  in 
the  reserve  fund  in  the  Treasury  for  the  redemption  of  United  States  notes 
and  Treasury  notes  shall  fall  and  remain  below  one  hundred  million 
dollars  the  authority  to  issue  certificates  as  herein  provided  shall  be 
suspended :  And  provided  further,  That  whenever  and  so  long  as  the 
aggregate   amount   of   United    States   notes   and    silver   certificates    in    the 


SMITH'S  FINANCIAL  DICl'lONARY.  231 

general  fund  of  tho  lixasury  shall  exceed  sixty  million  dollars  the  Secre- 
tary of  the  Treasury  may,  in  his  discretion,  suspend  the  issue  of  the  cer- 
tificates herein  provided  for:  And  provided  further,  'J'hat  of  the  amount 
01  such  outstanding  certificates  one-fourth  at  least  shall  be  in  denomina- 
tions of  fifty  dollars  or  less:  And  provided  further,  That  the  Secretary  of 
the  Treasury  may,  in  nis  discretion,  issue  such  certificates  in  denomina- 
tions of  ten  thousand  dollars,  payable  to  order.  And  section  fifty-one  hun- 
dred and  ninety-three  of  the  Revised  Statutes  is  hereby  repealed. 

Sec.  7.  That  hereafter  silver  certificates  shall  be  issued  on';y  of  de- 
nominations of  ten  dollars  and  under,  except  that  not  exceeding  in  the 
aggregate  ten  per  centum  of  the  total  volume  of  said  certificates,  in  the 
discretion  of  the  Secretary  of  the  Treasury,  may  be  issued  in  denomina- 
tions of  twenty  dollars,  fifty  dollars,  and  one  hundred  dollars ;  and  silver 
certificates  of  higher  denomination  than  ten  dollars,  except  as  herein  pro- 
vided, shall,  whenever  received  at  the  Treasury  or  redeemed  be  retired 
and  canceled,  and  certificates  of  denominations  of  ten  dollars  or  less  shall 
be  substituted  therefor,  and  after  such  substitution,  in  whole  or  in  part,  a 
like  volume  of  United  States  notes  of  less  denomination  than  ten  dollars 
shall  from  time  to  time  be  retired  and  canceled,  and  notes  of  denomina- 
tions of  ten  dollars  and  upward  shall  be  reissued  in  substitution  therefor, 
with  like  qualities  and  restrictions  as  those  retired  and  canceled. 

Sec.  8.     That  the   Secretary  of  the  Treasury  is  hereby  authorized  to 

use,  at  his  discretion,  any  silver  bullion  in  the  Treasury  of  the  United 
States  purchased  under  the  Act  of  July  fourteenth,  eighteen  hundred  and' 
ninety,  for  coinage  into  such  denominations  of  subsidiary  silver  coin  as 
may  be  necessary  to  meet  the  public  requirements  for  such  coin :  Provided, 
That  the  amount  of  subsidiary  silver  coin  outstanding  shall  not  at  any 
time  exceed  in  the  aggregate  one  hundred  millions  of  dollars.  Whenever 
any  silver  bullion  purchased  under  the  Act  of  July  fourteenth,  eighteen 
hundred  and  ninety,  shall  be  used  in  the  coinage  of  subsidiary  silver  coin, 
an  amount  of  Treasury  notes  issued  under  said  Act  equal  to  the  cost  of 
the  bullion  contained  in  such  coin  shall  be  canceled  and  not  reissued. 

Sec.  9.  That  the  Secretary  of  the  Treasury  is  hereby  authorized  and 
directed  to  cause  all  worn  and  uncurrent  subsidiary  silver  coin  of  the 
United  States  now  in  the  Treasury,  and  hereafter  received,  to  be  recoined, 
and  to  reimburse  the  Treasurer  of  the  United  States  for  the  diflference 
between  the  nominal  or  face  value  of  such  coin  and  the  amount  the  same 
will  produce  in  new  coin  from  any  moneys  in  the  Treasury  not  otherwise 
appropriated. 

Sec.  10.  That  section  fifty-one  hundred  and  thirty-eight  of  the  Re- 
vised Statutes  is  hereby  amended  so  as  to  read  as  follows : 

"Section  5138.  No  association  shall  be  organized  with  a  less  capital 
than  one  hundred  thousand  dollars,  except  that  banks  with  a  capital  of  not 
less  than  fifty  thousand  dollars  may,  with  the  approval  of  the  Secretary  of 
the  Treasury,  be  organized  in  any  place  the  population  of  which  does  not 
e.xceed  six  thousand  inhabitants,  and  except  that  banks  with  a  capital  of 
not  less  than  twcntv-fivc  thousand   dollars  mav,  with  the   sanction   of  the 


222  SMITH'S  FINANCIAL  DICTIONARY. 

Secretary  of  the  Treasury,  be  organized  in  any  place  the  population  of 
which  does  not  exceed  three  thousand  inhabitants.  No  association  shall 
be  organized  in  a  city  the  population  of  which  exceeds  fifty  thousand  per- 
sons with  a  capital  of  less  than  two  hundred  thousand  dollars." 

Sec.  II.     That  the  Secretary  of  the  Treasury  is  hereby  authorized  to 
receive  at  the  Treasury  any  of  the  outstanding  bonds  of  the  United  States 
bearing  interest  at  five  per  centum  per  annum,  payable  February  first,  nine- 
teen hundred  and  four,  and  any  bonds  of  the  United  States  bearing  interest 
at  four  per  centum  per  annum,  payable  July  first,  nineteen  hundred  and 
seven,  and  any  bonds  of  the  United  States  bearing  interest  at  three  per 
centum  per  annum,  payable  August  first,  nineteen  hundred  and  eight,  and 
to  issue  in  exchange  therefor  an  equal  amount  of  coupon  or  registered 
bonds  of  the  United  States  in  such  form  as  he  may  prescribe,  in  denomi- 
nations of  fifty  dollars  or  any  multiple  thereof,  bearing  interest  at  the  rate 
of  two  per  centum  j)er  annum,  payable  quarterly,  such  bonds  to  be  payable 
at  the  pleasure  of  the  United  States  after  thirty  years  from  the  date  of 
their  issue  and  said  bonds  to  be  payable,  principal  and  interest,   in  gold 
coin  of  the  present  standard  value,  and  to  be  exempt  from  the  payment  of 
all  taxes  or  duties  of  the  United  States,  as  well  as  from  taxation  in  any 
form  by  or  under   State,  municipal,  or  local  authority :     Provided,    That 
such  outstanding  bonds  may  be  received  in  exchange  at  a  valuation  not 
greater  than  their  present  worth  to  yield  an  income  of  two  and  one-quarter 
per  centum  per  annum ;  and  in  consideration  of  the  reduction  of  interest 
effected,  the  Secretary  of  the  Treasury  is  authorized  to  pay  to  the  holders 
of  the  outstanding  bonds  surrendered  for  exchange,  out  of  any  money  in 
the  Treasury  not  otherwise  appropriated,  a  sum  not  greater  than  the  differ- 
ence between  their  present  worth,  computed  as  aforesaid,  and  their  par 
value,  and  the  payments  to  be  made  hereunder  shall  be  held  to  be  payments 
on  account  of  the  sinking  fund  created  by  section  thirty-six  hundred  and 
ninety-four  of  the  Revised  Statutes :     And  provided  further,  That  the  two 
per  centum  bonds  to  be  issued  under  the  provisions  of  this  Act  shall  be 
issued  at  not  less  than  par,  and  they  shall  be  numbered  consecutively  in 
the  order  of  their  issue,  and  when  payment  is  made  the  last  numbers  issued 
shall  be  first  paid,  and  this  order  shall  be  followed  until  all  the  bonds  art 
paid,  and  whenever  any  of  the  outstanding  bonds  are  called  for  payment 
interest   thereon    shall    cease   three   months   after   such   call;    and   there   is 
hereby  appropriated  out  of  any  money  in  the  Treasury  not  otherwise  ap- 
propriated, to  effect  the  exchanges  of  bonds  provided  for  in  this   Act,  a 
sum   not  exceeding  one-fifteenth  of  one  per  centum  of  the  face  value  of 
said  l)onds,  to  pay  the  expense  of  preparing  and  issuing  the  same  and  other 
expenses  incident  thereto. 

Sec.  12.  'I'hat  upon  the  deposit  with  the  Treasurer  of  the  United 
States,  by  any  national  banking  association,  of  any  bonds  of  the 
United  States  in  the  manner  provided  by  existing  law.  such  association 
shall  be  entitled  to  receive  from  the  Comptroller  of  the  Currency  circula- 
ting notes  in  blank,  registered  and  countersigned  as  provided  by  law,  equal 
in  amount   to  the  par  value  of  thf  bonds  so  deposited;   and  any  national 


SMITH'S  FINANCIAL  DICTIONARY.  233 

banking  association  now  having  bonds  on  deposit  'for  the  security  of  cir- 
culating notes,  and  upon  which  an  amount  of  circulating  notes  has  been 
issued  less  than  the  par  value  of  the  bonds,  shall  be  entitled,  upon  due 
application  to  the  Comptroller  of  the  Currency,  to  receive  additional  cir- 
culating notes  in  blank  to  an  amount  which  will  increase  the  circulating 
notes  held  by  such  association  to  the  par  value  of  the  bonds  deposited,  such 
additional  notes  to  be  held  and  treated  in  the  same  way  as  circulating 
notes  of  national  banking  associations  heretofore  issued,  and  subject  to  all 
the  provisions  of  law  aflfecting  such  notes :  Provided,  That  nothing  herein 
contained  shall  be  construed  to  modify  or  repeal  the  provisions  of  section 
fifty-one  hundred  and  sixty-seven  of  the  Revised  Statutes  of  the  United 
Estates,  authorizing  the  Comptroller  of  the  Currency  to  require  additional 
deposits  of  bonds  or  of  lawful  money  in  case  the  market  value  of  the 
bonds  held  to  secure  the  circulating  notes  shall  fall  below  the  par  value 
of  the  circulating  notes  outstanding  for  which  such  bonds  may  be  deposited 
as  security :  And  provided  further,  That  the  circulating  notes  furnished 
to  national  banking  associations  under  the  provisions  of  this  Act  shall  be 
of  the  denominations  prescribed  by  law,  except  that  no  national  banking 
association  shall,  after  the  passage  of  this  Act,  be  entitled  to  receive  from 
the  Comptroller  of  the  Currency,  or  to  issue  or  reissue  or  place  in  circula- 
tion, more  than  one-third  in  amount  of  its  circulating  notes  of  the  denomi- 
nation of  five  dollars :  And  provided  further,  That  the  total  amount  of 
such  notes  issued  to  any  association  may  equal  at  any  time  but  shall  not 
exceed  the  amount  at  such  time  of  its  capital  stock  actually  paid  in:  And 
provided  further,  That  under  regulations  to  be  prescribed  by  the  Secre- 
tary of  the  Treasury  any  national  banking  association  may  substitute  the 
two  per  centum  bonds  issued  under  the  provisions  of  this  Act  for  any  of 
the  bonds  deposited  with  the  Treasurer  to  secure  circulation  or  to  secure 
deposits  of  public  money;  and  so  much  of  an  Act  entitled  "An  Act  to 
enable  national  banking  associations  to  extend  their  corporate  existence, 
and  for  other  purposes,"  approved  July  twelfth,  eighteen  hundred  and 
eighty-two,  as  prohibits  any  national  bank  which  makes  any  deposit  of 
lawful  money  in  order  to  withdraw  its  circulating  notes  from  receiving  any 
increase  of  its  circulation  for  the  period  of  six  months  from  the  time  it 
made  such  deposit  of  lawful  money  for  the  purpose  aforesaid,  is  hereby 
repealed,  and  all  other  Acts  or  parts  of  Acts  inconsistent  with  the  pro- 
visions of  this  section  are  hereby  repealed. 

Sec.  13.  That  every  national  banking  association  having  on  deposit, 
as  provided  by  law,  bonds  of  the  United  States  bearing  interest  at  the  rate 
of  two  per  centum  per  annum,  issued  under  the  provisions  of  this  Act  to 
secure  its  circulating  notes,  shall  pay  to  the  Treasurer  of  the  United  States, 
in  the  months  of  January  and  July,  a  tax  of  one-fourth  of  one  per  centum 
each  half  3'ear  upon  the  average  amount  of  such  of  its  notes  in  circulation 
as  are  based  upon  the  deposit  of  said  two  per  centum  bonds ;  and  such 
taxes  shall  be  in  lieu  of  existing  taxes  on  its  notes  in  circulation  imposed 
by  section  fifty-two  hundred  and  fourteen  of  the  Revised  Statutes. 

Sec.  14.      That  the  provisions  of  this  Act  are  not  intended  to  preclude 


^S4  SMITH'S  FINANCIAL  DICTIONARY. 

the  accomplishment  of  international  bimetallism  whenever  conditions  shall 
make  it  expedient  and  practicable  to  secure  the  same  by  concurrent  action 
of  the  leading  commercial  nations  of  the  world  and  at  a  ratio  which  shall 
insure  permanence  of  relative  value  between  gold  and  silver. 

Gold  value.  The  value  of  any  quantity  or  mass  of  gold  de- 
pends upon  its  fineness  as  well  as  its  weight.  Fineness  means 
the  proportion  of  pure  gold  and  usually  it  is  expressed  in 
thousandths. 

The  coins  of  the  United  States,  both  gold  and  silver,  are  .900 
fine,  that  is,  nine-tenths  pure  metal  and  one-tenth  alloy,  the 
alloy  in  a  gold  coin  being  one  part  silver  and  nine  parts  cop- 
per, while  that  in  a  silver  coin  is  copper. 

An  ounce  of  fine  (pure  )gold  is  w^orth  $20.67.2;  an  ounce  of 
standard  gold  (.900  fine)  is  worth  $18.60.5. 

Good  delivery.  While  this  term  is  colloquially  in  common 
use  the  New  York  Stock  Exchange  rules  for  delivery  drop 
the  word  good  as  superfluous.  A  thing,  as  a  stock  or  a  bond, 
is  a  delivery  (is  deliverable)  on  a  contract  or  is  not  a  delivery 
(is  not  deliverable).     For  information  see  Delivery,  A. 

Good  merchantable  brand.  Abbreviation,  G.  M.  B. ;  this 
trade  term  is  more  commonly  used  in  Great  Britain  than  in 
the  United  States. 

Good  merchantable  quality  and  condition.  A  commercial 
term,  meaning  that  the  goods  supplied  must  be  of  the  custom- 
ary standard. 

Good  ordinary  brand.  A  commercial  term ;  abbreviation, 
G.  O.  B. 

Goods  traffic.  English  teriu  for  what  in  the  United  States 
is  called  freight  traffic,  or  in  other  words,  freight  carried. 

Gorgonzola  Hall.  A  facetious  designation  for  the  London 
Stock  Exchange  because  of  the  resemblance  of  its  marble 
interior  walls  to  gorgonzola  cheese. 

Goschens.  London  Stock  Exchange  name  for  the  British 
consols  bearing  2  3-4  per  cent  interest  until  1903  and  then 
2  1-2  per  cent  rmd  redeemable  in  1923.  These  consols  were 
converted  froiu  3  i)cr  cents  by  Mr.  Goschen. 

Gould  stocks.  So  called  because  of  the  preponderating 
ownernslii])  of  them  by  tlic  Jay  Gould  estate;  the  stocks  of 
the    Denver    dv     Rio    (irandc,    ATissotuM    Pacific,    Rio    Grande 


SMirirs  I'INANCIAL  DICTIONARY.  235 

Western,  St.  Louis  Southwestern.  1'exas  &  Pacific,  Wabash, 
and  Wheeling-  &  Lake  Eric  raih-oads,  and  Western  L'nion 
Telegraph  Company. 

Governing  committee.  The  name  of  the,  general  governing- 
body  of  the  New  York  Stock  Exchange,  composed  of  40  per- 
sons, ten  of  whom  are  elected  on  the  second  Monday  in  May 
of  each  year  to  serve  for  the  ensuing  four  years.  The  presi- 
dent and  the  treasurer  of  the  exchange  are  added  to  the  gov- 
erning committee.  A  member  of  the  governing  committee  is 
commonly  called  a  governor.  The  Consolidated  Stock  and 
Petroleum  Exchange  is  governed  by  a  board  of  directors.  The 
name  of  the  governing  body  of  the  London  Stock  Exchange  is 
committee  for  general  purposes. 

Government  assay  bar.  This  is  a  bar  (ingot)  of  pure  gold 
or  a  bar  of  pure  silver  made  by  and  bearing  the  assay  stamp 
of  the  government.  A  commercial  bar  is  one  made  by  a  pri- 
vate concern  ;  its  market  value  in  money  is  fractionally  lower 
than  that  of  a  government  bar. 

Government  bar.  Same  as  government  assay  bar ;  see  Gov- 
ernment assay  bar. 

Government  bond.  A  bond  issued  by  the  United  States 
government  is  commonly  designated  a  government  bond. 

Government  crop  report.  A  report  issued  monthly  by  the 
Department  of  Agriculture  of  the  United  .States  telling  the 
condition  of  the  various  crops  and  furnishing  other  related 
information.  The  report  is  issued  on  the  loth  of  the  month 
and  gives  conditions  as  they  existed  on  the  ist  of  the  month. 
A  report  on  cotton  is  issued  separately  on  the  3d  of  the  month 
and  gives  conditions  as  they  existed  on  the  25th  of  the  pre- 
ceding month. 

The  reports  issued  in  the  different  months  of  the  year  show: 

Report  of  January. — Total  number,  compared  with  that  of  January 
of  the  previous  year,  of  horses,  mules,  milch  cows,  other  cattle,  hogs,  and 
sheep.  Average  price  of  horses  and  mules  per  head — under  one  year; 
between  one  and  two  years ;  between  two  and  three  years ;  over  three 
years.  Average  price  of  milch  cows  per  head ;  average  price  of  other 
cattle  per  head — under  one  year ;  between  one  and  two  years ;  between  two 
and  three  years ;  over  three  years.  Average  price  of  hogs  per  head — 
under  one  year;   one  year  and  over.     Average  price  of  sheep  per  head — 


236  .  SMITH'S  FINANCIAL  DICTIONARY. 

under  one  year;  one  year  and  over.  Number  killed  by  dogs  in  previous 
y  ar. 

Report  of  February. — None. 

Report  of  March. — The  proportion  of  the  corn  crop  of  the  previous 
year  remaining  in  farmers'  hands  for  consumption  or  sale  on  March  i. 
Proportion  of  said  crop  that  has  been  and  will  be  consumed  in  the  state, 
county,  etc.  Proportion  of  said  crop  which  was  of  marketable  quality. 
Proportion  of  said  crop  that  yet  remains  in  the  field.  Average  farm  value 
of  the  corn  on  hand:  first,  merchantable  per  bushel  (shelled);  second, 
unmerchantable  per  bushel  (shelled).  The  proportion  of  the  wheat  crop 
of  the  previous  year  remaining  in  farmers'  hands  for  consumption  or  sale 
on  March  i.  Proportion  of  said  crop  that  has  been  or  will  be  consumed 
in  the  state,  county,  etc.  Average  weight  per  bushel  (lbs.)  of  said  crop 
raised  in  the  state,  county,  etc.,  in  the  previous  year.  Oats:  Proportion 
of  the  oat  crop  of  the  previous  year  remaining  in  farmers'  hands  for  con- 
sumption or  sale  on  March  i.  Proportion  that  has  been  or  will  be  con- 
sumed in  the  state,  county,  etc.  Average  weight  per  bushel  of  the  oat  crop 
(lbs.)    of  the  previous  year. 

Report  of  April. — Condition  of  winter  wheat  and  winter  rye ;  condi- 
tion of  soil  during  the  planting  season  of  winter  wheat,  whether  favorable 
to  seeding  or  germination;  whether  the  period  subsequent  to  seeding  win- 
ter wheat  has  been  favorable  to  the  plant;  whether  the  plant  (winter 
wheat)  has  had  the  usual,  amount  of  protection  by  snow;  whether  there 
has  been  any  damage  to  winter  wheat  by  Hessian  flies.  How  many  in 
every  thousand  have  died  during  the  previous  year  of  horses,  from  dis- 
eases;  of  cattle,  from  exposure  and  from  disease;  of  sheep,  not  including 
spring  lambs,  from  exposure  and  from  disease;  and  of  swine  from  dis- 
ease. Estimated  number  of  breeding  sows  March  31,  compared  with  that 
of  [March  31  of  the  previous  year. 

Report  of  May. — What  proportion  of  the  area  sown  the  previous  fall 
in  winter  wheat  will  not  be  harvested ;  condition  of  growing  crop  of 
winter  wheat ;  condition  of  crop  of  winter  rye ;  condition  of  meadow  mow- 
ing lands ;  condition  of  spring  pasture ;  the  proportion  of  spring  plowing 
already  done.     Acreage  of   cotton;   average  condition  of  cotton. 

Report  of  June. — Condition  of  winter  wheat ;  acreage  and  condition 
of  spring  wheat ;  acreage  and  condition  of  winter  and  spring  rye ;  acreage 
and  condition  of  oats ;   acreage  and  condition  of  barley. 

Report  of  /«/>'.— Estimated  area  of  corn  and  Irish  potatoes  planted 
during  the  year;  percentage  of  wheat  crop  of  previous  year  still  on  hand; 
condition  of  corn,  of  winter  wheat,  of  spring  wheat;  of  winter  rye,  of 
spring  rye,  of  oats,  of  barley,  of  Irish  potatoes.  Average  weight  per 
fleece  of  wool    (lbs.).     Condition  of  cotton. 

Report  of  Augu.it. — Quality  of  oats  on  hand ;  acreage  of  buchwheat 
and  hay ;  condition  of  corn,  of  spring  wheat,  of  oats,  spring  rye,  barley, 
buckwheat,  potatoes    (Irish),  sweet  potatoes,  hay,  condition  of  cotton. 

Report  of  September. — Conditions  of  corn,  potatoes  (Irish),  sweet 
potatoes,   luiokwheat.    wheat.     Condition   when    harvested    of   wheat,    oats, 


SMITH'S  FINANCIAL  DICTIONARY.  237 

barley,  and  rye.  Number  of  hogs  and  condition  as  to  healthfulness  and 
flesh. 

Report  of  October. — Condition  of  corn;  average  yield  and  quality  of 
the  crops  of  wheat,  oats,  rye,  and  barley.  Condition  of  buckwheat,  Irish 
potatoes,  sweet  potatoes,  tobacco,  apples,  rice,  and  sugar  cane.  Average 
yield,  quality,  and  percentage  production  of  hops.     Condition  of  cotton. 

Report  of  November. — Average  yield  per  acre  of  corn  per  bushel, 
shelled;  quality  of  corn;  old  corn  on  hand  from  crops  of  previous  years; 
average  yield  per  acre  and  quality  of  buckwheat,  Irish  potatoes,  hay, 
and  tobacco;  average  yield  per  acre  of  rice;  production  of  sugar  cane. 

Report  of  December. — Production  and  average  price  per  bushel  on 
December  i  of  corn,  wheat,  oats,  rye,  barley,  buckwheat,  Irish  potatoes, 
sweet  potatoes,  hay,  and  rice.  Area  sown  and  average  condition  of  winter 
wheat,  winter  rye.     Average  price  per  pound  of  cotton  and  leaf  tobacco. 

In  reporting  the  condition  of  the  crops  the  basis  is  100, 
which  stands  for  a  normal  condition.  Therefore,  a  condition 
above  100  is  above  the  normal,  v^hile  a  condition  below  100  is 
below  the  normal. 

A  normal  condition  is  a  condition  that  indicates  a  full  crop — 
not  an  average  crop,  which  lacks  something  of  being  a  full 
crop;  nor  yet  an  extraordinary  crop,  which  is  more  than  (is  in 
excess  of)  a  full  crop. 

The  normal  condition,  or  a  condition  of  100  per  cent,  is  de- 
fined as  follows  in  "The  Crop  Reporter,"  a  publication  of  the 
Department  of  Agriculture : 

THE  NORMAL. 

So  many  of  the  reports  of  the  Statistician  of  the  Department  of  Agri- 
culture are  based  upon  a  comparison  with  the  "normal"  that  it  is  a  matter 
of  the  greatest  importance  that  there  should  be  a  clear  understanding  of 
what  the  normal  really  means. 

To  begin  with,  a  normal  condition  is  not  an  average  condition,  but  a 
condition  above  the  average,  giving  promise  of  more  than  an  average  crop. 

Furthermore,  a  normal  condition  does  not  indicate  a  perfect  crop,  or 
a  crop  that  is  or  promises  to  be  the  very  largest  in  quantity  and  the  very 
best  in  quality  that  the  region  reported  upon  may  be  considered  capable  of 
producing.  The  normal  indicates  something  less  than  this,  and  thus 
comes  between  the  average  and  the  possible  maximum,  being  greater  than 
the  former  and  less  than  the  latter. 

The  normal  may  be  described  as  a  condition  of  perfect  healthfulness, 
unimpaired  by  drought,  hail,  insects,  or  other  injurious  agency,  and  with 
such  growth  and  development  as  may  reasonably  be  looked  for  under 
these  favorable  conditions.  As  stated  in  the  instructions  to  correspond- 
ents, it  does  not  represent  a  crop  of  extraordinary  character,  such  as 
may  be   produced   here   and   there  by  the   special   effort   of   some   highly 


238  SMITH'S  FINANCIAL  DICTIUNARV. 

skilled  farmer  with  abundant  means,  or  such  as  may  be  grown  on  a  bit  of 
land  of  extraordinary  fertility,  or  even  such  as  may  be  grown  quite  exten- 
sively once  in  a  dozen  years  in  a  season  that  is  extraordinarily  favorable 
to  the  crop  to  be  raised.  A  normal  crop,  in  short,  is  neither  deficient  on 
the  one  hand  nor  extraordinarily  heavy  on  the  other.  While  a  normal 
condition  is  but  rarely  reported  for  the  entire  corn,  wheat,  cotton,  or  other 
crop  area,  at  the  same  time  or  in  the  same  year,  its  local  occurrence  is  by 
no  means  uncommon,  and  whenever  it  is  found  to  exist,  it  should  be  indi- 
cated by  the  number  lOO. 

Sometimes  a  favorable  season  for  planting  is  followed  by  a  favor- 
able growing  season,  with  no  blight  and  no  depredations  by  in- 
sects, the  result  being  a  normal  condition.  At  other  times  the  normal 
may  be  maintained  by  conditions  that  are  exceptionally  favorable  in  one 
or  more  particulars  counterbalancing  conditions  that  are  unfavorable  in 
other  particulars.  Thus,  a  crop  may  have  had  such  an  unusually  good 
start  that  it  may  pass  without  injury  through  a  period  of  drought  that 
would  otherwise  have  proved  disastrous  to  it,  or  its  more  than  ordinary 
vigor  and  potentiality  may  fully  offset  some  slight  injury  from  insects. 

The  normal  not  being  everywhere  the  same,  in  determining  how  near 
the  condition  of  any  given  crop  is  to  the  normal  correspondents  will 
usually  find  it  an  advantage  to  have  a  definite  idea  of  what  yield  per  acre 
would  constitute  a  full  normal  crop  in  their  respective  districts;  that  is, 
how  many  bushels,  pounds,  or  tons  per  acre  of  a  particular  crop  would  be 
produced  in  a  season  that  was  distinctly  but  not  exceptionally  favorable. 
In  a  region  where  30  bushels  of  corn  may  be  taken  as  the  normal,  a  condi- 
tion of  90  would  give  a  prospect  of  a  crop  of  27  bushels,  and  80  a  crop  of 
24  bushels.  If  40  bushels  be  considered  the  normal  yield,  90  (or  ten  per 
cent  less  than  the  normal)  would  indicate  a  crop  of  36  bushels,  80  one  of  32 
bushels,  70  one  of  28  bushels. 

For  the  reason  that  the  normal,  represented  by  100,  does  not  indicate 
a  perfect  or  the  largest  possible  crop,  it  may  occasionally  be  exceeded. 
The  condition  may  be  so  exceptionally  favorable  as  to  promise  a  crop  that 
will  exceed  the  normal,  and  it  will  accordingly  have  to  be  expressed  by 
105,  no,  or  whatever  other  figures  may  seem  warranted  by  the  facts; 
105  representing  five  per  cent  above  the  normal,  no  ten  per  cent,  and  so 
forth. 

Government  depository.  A  national  bank  designated  to  re- 
ceive deposits,  of  taxes  and  other  public  dues  collected  by  the 
national  government.  Security  has  to  be  provided  for  the 
safe  keeping  and  delivery  of  these  funds. 

Government  note.  A  name  sometimes  applied  to  paper 
money  issued  by  the  government,  to  distinguish  it  from  a  bank 
iu)U' — a  note  issued  by  a  national  bank. 

Governments.  As  a  financial  term  this  word  means  securi- 
ties issued  by  the  I'nitcd  States  government. 


SMITH'S  FINANCIAL  DICTIONARY.  239 

Grace.  Three  days  directly  following;  the  maturity  of  a 
promissory  note  or  bill  of  exchange  (draft)  allowed  debtors 
by  law  in  some  states  in  which  to  make  payment. 

In  most  states  grace  has  been  abolished  on  all  forms  of 
paper,  in  some  states  grace  is  not  allowed  on  demand  drafts, 
but  is  allowed  on  sight  drafts ;  in  other  states  it  is  allowed  on 
both. 

A  note  payable  on  January  i,  with  grace,  is  in  all  respects 
the  equivalent  of  a  note  payable  on  January  4,  without  grace. 
The  first  named  note  is  not  due  in  fact  or  in  law  until  January 
4.  Interest  is  to  be  paid  for  the  three  days  of  grace  as  for  any 
other  portion  of  the  time  the  note  has  to  run.  The  holder 
cannot  demand  -payment  until  the  days  of  grace  of  payment 
have  expired  and  the  debtor  cannot  make  payment,  except 
with  the  consent  of  the  holder,  until  such  time.  Should  the 
note  be  paid  before  the  last  day  of  grace  and  not  be  taken  up 
any  purchaser  who  might  obtain  it  from  the  holder  for  a  valu- 
able consideration  before  the  last  day  of  grace  in  ignorance 
of  the  fact  that  payment  of  it  had  been  made  could  enforce  it 
notwithstanding  such  payment.  He  would  be  a  holder  who 
had  taken  the  note  before  maturity.  The  efifect  of  grace  is 
simply  to  postpone  the  date  of  payment  precisely  as  might  be 
done  in  a  jurisdiction  where  grace  did  not  prevail  by  making 
the  paper  payable  upon  its  face  and  by  its  express  terms  upon 
the  date  upon  which  the  last  day  of  grace  falls. 

Grain.  The  term  grain  as  ordinarily  used  is  construed  as 
meaning  wheat,  corn  and  oats. 

Grain  bill.  A  draft  (bill  of  exchange)  drawn  against  the 
buyer  or  consignee  of  a  shipment  of  grain.  The  bill  of  lading 
is  attached  to  (accompanies)  the  draft  and  is  surrendered  on 
payment  or  acceptance,  as  the  case  may  be,  of  the  draft. 

Granger  railroads.  Wall  Street  name  for  the  Chicago  & 
Alton ;  Chicago,  Burlington  &  Ouincy ;  Chicago.  Rock  Is- 
land &  Pacific;  Chicago,  Milwaukee  &  St.  Paul,  and  Chi- 
cago &  Northwestern  railroads.  These  railroads  are  called 
granger  roads  because  they  are  largely  dependent  for  their 
earnings  on  the  grain  and  other  farm  (grange)  produce  which 
they  carry. 

Grant  &  Ward  panic.     So  called  because  it  had  its  inception 


240  SMITH'S  FINANCIAL  DICTIONARY. 

in  the  failure  on  May  6,  1884,  of  the  banking  and  stock  brok- 
erage firm  of  Grant  &  Ward,  of  which  ex-President  U.  S. 
Grant  was  senior  partner.  The  failure  of  the  Marine  Bank, 
the  Metropolitan  Bank  and  many  stock  brokers  followed. 
Great  dishonesty  was  disclosed  in  the  affairs  of  Grant  &  Ward 
and  the  Marine  Bank.  Ex-President  Grant  was  not  involved, 
but  his  partner,  Ferdinand  Ward,  and  James  D.  Fish,  who 
was  president  of  the  Marine  Bank,  were  sent  to  prison  for 
their  part  in  the  irregularities. 

Granted  a  quotation.  The  term  used  when  a  security  is  ad- 
mitted to  dealings  on  the  London  Stock  Exchange. 

Gratuity  fund.  An  insurance  fund  from  which  a  payment 
is  made  to  the  family  of  a  deceased  contributor  to  it.  Nearly 
all  exchanges  have  gratuity  funds. 

Greenback.  The  legal  tender  note  officially  designated  as 
the  United  States  note ;  called  greenback  because  the  back  is 
printed  in  green  ;  see  United  States  note. 

Gresham's  law.  This  is  not  an  enactment  but  a  law  of 
political  economy  as  expounded  by  Sir  Thomas  Gresham,  a 
former  master  of  the  British  mint.  It  is  that  where  there  are 
two  forms  of  money  the  inferior  or  depreciated  tends  to- 
drive  the  other  from  circulation  owing  to  the  hoarding  and 
exportation  of  the  better  form.  As  commonly  stated,  bad 
money  drives  out  good. 

Gresham's  words  were :  "When  two  sorts  of  coin  are  cur- 
rent in  the  same  nation,  of  like  value  by  denomination,  but  not 
intrinsically,  that  which  has  the  least  value  will  be  current  and 
the  other  as  much  as  possible  will  be  hoarded." 

Gross.  All ;  the  entire  amount.  For  instance,  the  gross 
earnings  of  a  company  are  its  entire  earnings. 

Gross  earnings.     Total  earnings. 

Gross  ton.  Same  as  long  ton ;  2,240  pounds ;  a  short  ton  is 
2,000  pounds.     A  metric  ton  is  2,204.6  pounds. 

Ground  floor.  A  colloquialism.  When  one  is  permitted  to 
acquire  securities  of  a  company  on  more  favorable  terms  than 
the  general  public  (as,  for  instance,  a  member  of  an  under- 
writing syndicate)  he  is  said  to  have  been  let  in  on  the  ground 
floor. 

G.  T.  C.     When  these  letters  are  used  on  an  order  to  buy  or 


SMITH;S  financial  dictionary.  241 

sell  stocks    or  commodities   they  mean  that  the  order  is  good 
till  countermanded  or  good  till  canceled. 

GTD.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  guaranteed,  as  bonds  the  interest  or  the  interest 
and  principal  of  which  are  guaranteed  by  a  company  other 
than  the  one  which  issued  them. 

Guarantee.     Same  as  guaranty ;  see   Guaranty. 

Guaranteed  bond.  A  bond  the  payment  of  the  principal  of 
and  interest  on  which  is  guaranteed  by  another.  A  railroad 
which  leases  another  railroad  usually  guarantees  the  principal 
of  and  interest  on  the  bonds  (and  often  the  dividends  on  the 
stock)  of  the  leased  road. 

Guaranteed  signature.  A  signature  the  genuineness  of 
Avhich  is  guaranteed  by  some  one  other  than  the  writer  of  it. 

Guaranteed  stock.  A  stock  the  dividends  on  which  are 
guaranteed  by  a  company  other  than  the  one  which  issued  it. 
A  railroad  which  leases  another  railroad  usually  guarantees 
the  dividends  on  the  stock  of  the  leased  road. 

Guarantor.     One  who  guarantees    or  insures  a  payment. 

Guaranty.  Same  as  guarantee ;  an  undertaking  by  one  per- 
son to  be  responsible  for  the  payment  of  a  debt  of  another  or 
for  the  performance  of  a  contract  by  another  who  stands  first 
bound  to  pay  or  perform. 

A  guaranty  is  always  enforceable  in  accordance  with  the 
strict  meaning  of  its  terms.  But  a  guaranty  of  payment  and 
a  guaranty  of  collection  impose  very  different  obligations  on 
the  guarantor.  A  guaranty  of  collection  is  an  undertaking  by 
the  guarantor  that  the  debt  will  be  paid  if  and  after  the  cred- 
itor employs  all  the  means  within  his  power  to  collect  it.  The 
guarantor  cannot  be  held  until  the  principal  debtor  has  been 
sued  and  judgment  secured  against  him  and  an  execution 
under  that  judgment  has  been  returned  unsatisfied. 

But  one  who  guarantees  the  payment  of  an  obligation  is  in 
default  the  moment  the  debt  is  due  and  unpaid.  For  he  has 
not  guaranteed  merely  that  it  can  be  collected  through  the 
usual  processes,  but  that  it  will  be  paid  when  due.  If  it  is  not 
so  paid  suit  may  be  brought  against  the  guarantor,  not  only 
before  any  suit  has  been  brought  against  the  principal  debtor, 
but  even  before  any  demand  of  payment  has  been  made  upon 


24^ 


SMITH'S  FINANCIAL  DICTIONARY. 


him.  If  the  principal  does  not  pay  promptly  when  the  debt  is 
due,  without  demand,  the  guarantor  immediately  becomes 
liable. 

Guilder.  The  former  name  for  the  unit  of  value  in  the 
Netherlands.  The  present  official  name  for  the  coin  is  florin, 
but  the  old  name,  guilder,  is  still  retained  in  transactions  in 
foreign  exchange.     Value,  40.2  cents. 

Guinea.  An  English  gold  piece,  not  coined  since  1817, 
worth  21  shillings  or  $5.10.98.  It  derived  its  name  from  the 
fact  that  it  was  first  coined  in  1663  from  Guinea  gold. 

Guinea  pig  director.  London  Stock  Exchange  term  for  di- 
rectors who  are  willing  to  serve  on  the  board  of  as  many  com- 
panies as  possible  merely  for  the  sake  of  the  fees  that  they 
receive.  The  term  is  said  to  be  derived  from  the  guinea  fee 
that  is  in  some  cases  paid  for  each  attendance. 

Gunning  for  shorts.  A  Wall  Street  colloquialism,  signify- 
ing that  means  are  being  employed  to  compel  bears  to  cover 
their  shorts,  or  in  other  words,  to  buy  back  the  stocks  they 
sold  short. 


H 


Half-dime.     A  silver  piece  formerly  issued  worth  5  cents. 

Half-dollar.  The  silver  coin  weighing  192.9  grains ;  it  is  .057 
inch  thick   and  its  diameter  is  1.2  inch. 

Half-eagle.  A  name  given  to  the  $5  gold  coin  of  the  United 
States;  weight,  129  grains;  thickness,  .046  inch;  diameter,  .85 
inch. 

Half-stock.  Stock  of  the  par  value  of  $50  instead  of  $100 
as  usual.     Slock  of  the  par  value  of  $100  is  called  full  stock. 

Hallmark.  English  ;  an  official  mark  stamped  on  articles  of 
gold  or  silver  to  indicate  that  they  are  of  standard  quality. 

Hammered.  Said  when  a  member  of  the  London  Stock 
Exchange  is  declared  a  defaulter — that  is,  when  he  fails  to 
meet  his  contracts. 


SMITH'S  FINANCIAL  DICTIONARY.  243 

The  head  waiter  (attendant),  acting  under  instructions  from 
the  committee  for  general  purposes,  strikes  three  blows  with 
his  wooden  hammer  or  mallet  on  his  rostrum  to  secure  atten- 
tion, after  which  he  announces  that  "Mr.  Blank  is  unable  to 
comply  with  his  bargains"  (contracts). 

Hammered  dollar.  Mexico  when  released  from  the  rule  of 
Spain  retained  a  large  amount  of  Spanish  silver  coins.  The 
royal  effigy  on  the  silver  dollar  was  officially  battered  or  ham- 
mered out  of  recognition,  which  served  the  double  purpose 
of  testifying  to  the  emancipation  of  Mexico  and  of  keeping  the 
coins  at  home.  The  silver  dollar  thus  defaced  was  commonly 
designated  as  the  hammered  dollar. 

Hammond's  time.  At  14  minutes  after  2  p.  m.  on  each  busi- 
ness day  except  Saturday  the  words  "Hammond's  time"  are 
printed  on  the  tape  by  the  stock  ticker  and  afterwards  the 
lever  of  the  instrument  sounds  fifteen  beats.  When  the  fif- 
teenth beat  is  sounded  it  is  2.15  p.  m.  and  the  end  of  the  time 
for  the  delivery  of  securities  in  settlement  of  contracts  entered 
into  on  the  New  York  Stock  Exchange  which  mature  on  the 
current  day.  Failure  by  a  seller  to  deliver  to  a  purchaser  by 
2.15  stocks  sold  on  the  New  York  Stock  Exchange  previously 
in  the  day  for  cash  (see  For  cash)  or  sold  in  the  regular  way 
(see  Regular  way)  on  the  preceding  day  constitutes  a  default 
by  the  seller  on  the  contract. 

A  watchmaker  named  Hammond  supplies  the  stock  ex- 
change with  its  official  time ;  hence  the  name  Hammond's 
time.  In  speaking  of  Hammond's  time  it  is  the  habit  to  ab- 
breviate it  to  simply  "time." 

The  stock  exchange  time  was  formerly  supplied  by  a 
watchmaker  named  Ladd  and  it  then  was  known  as  Ladd's 
time. 

Hand-to-hand  money.  This  term  applies  to  money  of  small 
denominations  such  as  ordinarily  passes  between  individuals 
or  ordinarily  is  used  in  trade. 

Hard.     Said  when  rates,  prices    or  markets  are  higher. 

Hard  coal.  A  common  name  for  anthracite  coal.  For  addi- 
tional information  see  Anthracite  coal. 

Hard  money.  A  colloquial  name  for  coins  of  gold  and 
silver,  as  distinguished  from  soft  or  paper  money. 


244  SMITH'S  FINANCIAL  DICTIONARY. 

Hard  spot.  A  stock  or  a  group  of  stocks  displaying  pro- 
nounced strength  in  an  otherwise  generally  weak  market. 

Head-money.  A  per  capita  tax ;  a  premium  or  bonus  of  so 
much  per  head. 

Hectolitre.  The  unit  of  grain  measurement  in  France ;  2.83 
bushels. 

Hedging.  An  operation  intended  as  a  protection  against 
loss  in  another  operation.  Usually  hedging  is  selling  against 
a  purchase  or  purchasing  against  a  sale ;  but,  as  in  stocks,  it 
may  be  buying  or  selling  one  stock  to  ofifset  a  possible  loss 
in  another. 

Hog  products.  In  speculation  these  are  pork  lard  and 
short  ribs.  Other  hog  products  are  sides,  hams,  shoulders  and 
bacon. 

Holder.     This  term  applies  to  one  who  has  possession  of 
or  holds  for  collection  any  negotiable  instrument,  as  a  check, 
bill  of  exchange   (draft)    or  promissory  note. 

Also,  one  who  owns  securities  (stocks  and  bonds)  is  a  holder 
of  securities. 

Holder  of  procuration.  One  who  holds  or  has  the  power  to 
sign  per  procuration ;  see  Per  procuration. 

Holding  company.  Same  as  securities  company ;  a  com- 
pany which  owns  the  securities  of  other  companies  and  de- 
pends for  its  income  upon  the  interest  and  dividends  yielded 
by  these  securities.  It  usually  issues  bonds  as  well  as  stock 
itself.  Its  bonds  are  collateral  trust  bonds,  being  secured  by 
the  bonds  or  stocks  of  other  companies  that  it  owns.  A  hold- 
ing company  is  not  necessarily  a  controlling  company — it  is 
not  necessary  that  it  should  possess  a  majority  of  the  stocks  of 
the  companies  whose  securities  constitute  or  are  included  in 
its  assets. 

Holding  the  bag.  A  Wall  Street  colloquialism ;  said  of  an 
unwilling  buyer.  For  example,  a  speculator  or  a  pool  may 
have  arranged  to  buy  a  certain  amount  of  a  particular  stock  in 
expectation  of  an  advance  in  it  only  to  find  out  when  the  pro- 
posed amount  has  been  accumulated  that  it  is  necessary  in 
consequence  of  free  offerings  to  continue  purchases  to  pre- 
vent a  fall  in  the  price.     If  the  speculator    or  pool    keeps  on 


SMITH'S  FINANCIAL  DICTIONARY.'  245 


buying  he  or  it  is,  in  Wall  Street  parlance,  holding  the  bag — 
that  is,  receiving  stock  that  others  wish  to  part  with. 

A  speculator  or  pool  may  hold  the  bag  in  grain,  cotton, 
coffee  or  any  other  speculative  commodity  as  well  as  in  a 
stock. 

Holding  the  floor.  Possessing  the  first  right  to  buy  or  to 
sell    in  accordance  with  exchange  rules.     See  Floor  rules. 

Holding  the  market.  Keeping  the  market  steady — buying 
to  prevent  a  decline    or  selling  to  prevent  an  advance. 

Also,  possessing  the  first  right  to  buy  or  sell  a  stock  (as  on 
an  exchange ;  see  Floor  rules)  is  holding  the  market  (for  that 
stock). 

Holiday.     See  Bank  holidays ;  also  see  Legal  holiday. 

Home  commerce  or  trade.  Same  as  domestic  commerce 
or  trade;  commerce  or  trade  exclusively  within  the  limits  of 
a  particular  country. 

Home  rails.  London  Stock  Exchange  name  for  the  shares 
of  railroads  in  Great  Britain. 

Honeycombed  with  stop  orders.  Said  when  a  speculative 
market  contains  many  stop  orders;  see  Stop  order. 

Honored.  Said  when  the  drawee  (the  one  who  is  to  accept 
or  pay)  accepts  or  pays  (as  required)  a  bill  of  exchange 
(draft)  on  presentation  to  him. 

Hours  of  business.     See  Business  hours. 

House,  The.  Among  members  of  the  London  Stock  Ex- 
change the  exchange  is  called  the  house,  the  same  as  in  New 
York  the  stock  exchange  is  called  the  board. 

Hypothecation.  The  pledging  of  securities  or  other  prop- 
erty as  collateral  for  loans.  When  securities  are  pledged  for 
a  loan  the  title  to  them  is  surrendered  to  the  bank  or  other 
lender  with  which  or  whom  they  are  pledged. 

On  the  London  Stock  Exchange  stock  pledged  as  collateral 
is  said  to  be  pawned. 

Hypothecation  certificate.  A  certificate  lodged  by  the  seller 
with  the  buyer  of  a  bill  of  exchange  drawn  against  a  shipment 
of  property ;  it  describes  the  nature  of  the  shipment  and  states 
that  the  bill  of  lading,  insurance  policy,  etc.,  are  lodged  and 
pledged  with  the  holder  of  the  bill  of  exchange  as  security  for 
the  payment  of  the  bill  (or  for  the  acceptance  of  the  bill)  by 
the  drawee   (the  one  drawn  upon). 


?46  SMITH'S  FINANCIAL  DICTIONARY. 


I 


I.  As  printed  on  the  tape  by  the  stock  ticker  this  Roman 
numeral  means  first,  as  first  mortgage  bonds  or  first  income 
bonds    or  first  preferred  stock. 

II.  As  printed  on  the  tape  by  the  stock  ticker  these  Roman 
numerals  mean  second,  as  second  mortgage  bonds  or  second 
income  bonds  or  second  preferred  stock. 

III.  As  printed  on  the  tape  by  the  stock  ticker  these 
Roman  numerals  mean  third,  as  third  mortgage  bonds  or 
third  income  bonds. 

Identification  of  a  stockholder.  In  London  the  owner  of 
inscribed  stock  (government  or  municipal  bonds)  is  inscribed 
on  the  books  at  designated  places  of  registration.  The  own- 
er of  inscribed  stock  sold  on  the  London  Stock  Exchange 
has  to  be  identified  by  a  broker  on  the  exchange  or  his  clerk 
before  the  stock  sold  can  be  transferred.  Such  transfers,  how- 
ever, are  frequently  carried  out  by  means  of  a  power  of  at- 
torney. 

IMP.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  improvement,  as  improvement  bonds. 

Imperial  Bank  of  Germany.  An  institution  in  Berlin  cor- 
responding in  a  general  way  to  the  Bank  of  England  in 
London.  It  is  commonly  called  the  Reichsbank,  which  means 
Imperial  Bank. 

The  Imperial  Bank  of  Germany  has  existed  under  its  present 
name  since  January  i,  1876,  but  it  succeeded  the  Bank  of 
Prussia,  which  was  founded  in  1765.  Its  shares  are  owned  by 
individuals,  but  the  institution  is  under  the  supervision  of  the 
government.  The  bank  issues  notes,  but  has  no  exclusive 
privilege,  other  banks  also  being  permitted  to  issue  notes. 

Implied  contract.  A  contract  which  is  implied  or  imposed 
by  o])eration  of  law. 


SMITH'S  FINANCIAL  DICTIONARY.  247 

Importing  countries.  Countries  producing  less  grain  than 
is  required  for  home  consumption  and  relying  on  other  coun- 
tries to  supply  the  deficiency.  The  leading  grain  importing 
countries  are  Belgium,  Brazil,  China,  Germany,  Great  Britain, 
France,  Holland,  Italy,  Japan,  Spain    and  the  West  Indies. 

Imports.  Goods  or  any  articles  of  trade  or  commerce 
brought  into  a  country  from  another  country. 

Import  trade.  Goods  and  other  articles  of  commerce  bought 
and  brought  from  other  countries ;  another  name  is  inward 
trade. 

Impost.  A  government  tax  or  levy,  especially  a  customs 
duty. 

Improvement  bond.  A  bond  issued  for  improvements ; 
usually  of  about  the  standing  of  a  second  mortgage  bond,  al- 
though in  a  permanent  improvement  it  may  represent  a  first 
lien. 

IN.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  income,  as  income  bonds. 

Inactive  account.  (Or  slow  account)  ;  an  account  to  which 
debits  and  credits  are  not  frequently  added. 

An  inactive  account  in  a  bank  is  one  which  is  not  frequently 
augmented  by  deposits  and  likewise  is  not  frequently  dimin- 
ished by  drafts  upon  (by  checks  drawn  against)  it. 

An  inactive  speculative  account  (as  in  stocks,  grain,  cotton 
or  coffee,  etc.)  is  one  where  the  speculator  does  not  buy  and 
sell  with  frequency. 

Inactive  stock.  A  stock  little  dealt  in.  An  inactive  stock 
may  not  continue  inactive ;  it  may  rouse  into  activity  and  then 
it  becomes  and  is  classed  as  an  active  stock. 

In   and  out.     In    speculation  buying   and   then   selling  the 
same  stock  quickly,  or  the  reverse,  selling  and  then  buying. 
In  bond.     Held  under  bond    or  in  trust. 

Dutiable  imported  goods  may  be  placed  in  a  bonded  ware- 
house. The  owners  file  a  bond  to  pay  the  duties  when  the 
goods  are  withdrawn  from  the  warehouse.  Domestic  pro- 
ducts subject  to  the  internal  revenue  tax  may  also  be  placed  in 
bond  under  similar  conditions. 

In  case  of  need.     This  is  an  indorsement  sometimes  placed 


248  SMITH'S  FINANCIAL  DICTIONARY. 

on  a  bill  of  exchange  naming  a  person  who  will  pay  it  for  the 
honor  (credit)  of  the  drawer  (or  an  indorser)  shonld  the  bill 
not  be  met  (paid)  at  maturity  by  the  drawee  (the  one  who 
was  to  pay  it).  The  usual  form  is  'Tn  case  of  need  apply  to 
A.  B.  (Signed)  C.  D.,"  meaning  that  if  the  bill  is  not  paid 
A.  B.  will  pay  it  for  account  of  C.  D.  (the  drawer  or  an  in- 
dorser). Sometimes  the  indorsement  is  written  simply  "In 
need,  with  A.  B.     (Signed)  C.  D." 

Inclearer.  The  name  given  to  the  clerk  in  a  bank  in  Great 
Britain  who  receives  at  the  clearing  house  items,  (checks, 
drafts,  etc.)  to  be  collected  from  his  bank  and  who  makes  a 
record  of  them  and  strikes  the  balance  at  the  clearing  house 
between  the  debits  and  credits  of  his  bank. 

Also  see  Outclearer. 

Income.  Revenue ;  the  amount  of  money  coming  to  a  per- 
son or  a  corporation  (usually  interpreted  as  meaning  an- 
nually), whether  as  payment  for  services  or  as  interest  or 
other  profit  from  investment. 

See  Income  table. 

Income  account.  Also  called  revenue  account;  contains,  in 
the  case  of  a  stock  company,  (i)  gross  earnings;  (2)  opera- 
ting expenses ;  (3)  net  income  from  all  sources ;  (4)  charges 
for  interest,  etc.,  and  all  charges  before  dividends ;  (5)  divi- 
dends   and  surplus. 

Income  basis.  The  percentage  of  return  from  an  invest- 
ment, as,  for  example,  the  percentage  that  the  interest  on  a 
bond  or  the  dividend  on  a  stock  equals  when  calculated  on 
the  cost  of  the  bond  or  stock. 

A  bond  or  stock  paying  6  per  cent  which  is  bought  at  120 
returns  or  yields  5  per  cent ;  therefore,  this  bond  or  stock  at 
120  is  on  a  5  per  cent  income  basis. 

The  par  or  face  value  of  most  stocks  is  $100.  There  are 
many  stocks,  however,  of  the  par  or  face  value  of  $5,  $10,  $25 
and  $50.  Transactions  in  stocks  are  usually  by  percentage. 
A  stock  of  the  par  value  of  $100  which  is  quoted  at  75  is  worth 
$75,  or  in  other  words,  75  cents  on  the  dollar.  A  stock  of  the 
par  value  of  $50  which  is  quoted  at  75  is  worth  $37.50.     To 


SMITH'S  FINANCIAL  DICTIONARY.  249 

find  out  tlie  value  of  a  stock  in  dollars  multiply  its  face  value 
by  its  percentage  price,  thus: 

Par  or  face    $100 

Percentage  price    75 

500 
700 

Value    $7500 

Or,  omitting  ciphers,  $75. 

Another  example  follows : 

Par  or  face $25 

Percentage  price  57 

175 
125 

Value $1425 

Or,  after  the  insertion  of  the  decimal  point,  $14.25. 

Most  bonds  are  in  denominations  of  $1,000  or  $500,  but  there 
are  some  in  smaller  denominations.  There  are  United  States 
bonds  in  denominations  as  small  as  $20.  Transactions  in 
bonds  are  by  percentage  the  same  as  in  stocks.  To  find  the 
cost  of  a  bond  in  dollars  multiply  the  face  value  by  its  per- 
centage price,  thus : 

Face  value    $1000 

Percentage  price  97 

7000 
9000 

Cost     $97000 

Or,  omitting  ciphers,  $970. 

Another  example  follows : 

Face  value    $500 

Percentage  price   103 

1500 
500 
Cost    $51500 

Or,  omitting  ciphers,  $515. 


250  SMITH'S  FINANCIAL  DICTIONARY. 


To  ascertain  the  return  from  an  investment  divide  the  rate 
of  dividend  or  interest  by  the  percentage  price.  An  example 
follows  where  the  price  is  109  and  the  dividend  or  interest  is 
6  per  cent: 


109)6        (0055 

545 


550 
545 


5 
Omitting  the  ciphers  and  supplying  the  decimal  point  the 

return  is  shown  to  be  5.5  per  cent  and  a  fraction. 

See  Income  table. 

Income  bond.  A  bond  that  is  a  lien  on  the  net  income 
(earnings)  of  a  corporation ;  it  receives  interest  only  when 
earned  and  is  little  better  than  preferred  stock.  All  fixed 
charges  and  obligatory  payments  (including  taxes)  must  be 
met  before  anything  can  be  paid  on  an  income  bond,  but  it  is 
entitled  to  interest  up  to  a  specified  amount  before  a  dividend 
can  be  paid  on  stock,  either  preferred  or  common. 

Income  table.  On  succeeding  pages  is  printed  a  table 
showing  the  rate  per  cent  of  income  annually  realized  from 
stocks  or  bonds  at  different  yearly  rates  of  dividend  or  in- 
terest from  I  to  20  per  cent,  at  purchase  prices  from  10  to  300 
per  cent.  To  ascertain  the  rate  per  cent  of  income  find  the 
purchase  price  and  follow  the  line  of  figures  across  to  the 
column  headed  with  the  rate  of  dividend  or  interest. 


SMITirS  I- 1  NAN  CI  AL  DICTIONARY. 


251 


'uic'hase  Price. 


I  per 
cent. 


ij/>  per 
cent. 


2  per 
cent. 


2>2  per 
cent. 


3  per 
cent 


3/-2  per 
cent. 


10 

15 
20 
22 
24 


10 

6. 
5 
4 
A- 


.66 

54 
16 


15 
10 

7-50 
6.81 
6.25 


20 

13-33 

10 
9.09 
8.33 


25 

16.66 

12.50 

11.36 

10.41 


30 

20 

15 

13-63 

12.50 


35 

23-33 

17-50 

15-90 

14-58 


26 
28 
30 
32 
34 


,84 

■57 
■Z2, 
,12 

94 


5-76 

5-3.S 
5 

4.68 
A.41 


7.69 
7.14 
6.66 
6.25 
5-8« 


9.61 
8.92 

8-33 
7.81 

7-35 


11-53 
10.71 
10 

9-37 
8.82 


13-46 
12.50 
11.66 
10.93 
10.29 


36 
38 
40 
42 


77 
63 
50 
38 
27     I 


4.16 
3-94 
3-75 
3-57 
3-40 


5-55 
5.26 

5 
4.76 

4-54 


6.94 
6.57 
6.25 

5-95 
5-68 


8-33 
7.89 
7-50 

7.14 
6.81 


9.72 
9.21 
8-75 
8.33 
7-95 


46 
48 
50 
51 

52 


17 
08 

96 
92 


3-26 
3.12 
3 

2-94 
2.88 


4-34 
4.16 

4 

392 

3-84 


5-43 

5-20 

5 

4.90 

4.80 


6.52 

6.25 

6 

5-88 

5-76 


7.60 
7.29 

7 
6.86 

6.73 


S3 

54 
55 
56 
57 


.88 

.85 
.81 
■78 
-75 


2.83 

2.77 
2.72 
2.67 
2.63 


3-77 
3-70 
3-63 
3-57 
3-50 


4-71 
4.62 

4-54 
4.46 

4.38 


5-66 

5-55 
5-45 
5-35 
5-26 


6.60 
6.48 
6.36 
6.23 
6.14 


S8 

59 
60 

61 
62 


.72  I 

.69 

.66 

.63 
.61 


2.58 

2-54 
2.50 

2-45 
2.41 


3-44 
3-38 
3-33 
3-27 
3-22 


4-31 
4-23 
4.16 

4-09 
4-03 


5-17 
508 

5 
4.91 

4-83 


6.03 

5-93 
5.83 
5-73 
5-64 


63 

64 
6c 

66 

67 


.58 
.56 
-53 
•51 
•49 


2.38 
2.34 
2.30 
2.27 
2.23 


3-17 
3.12 

3-07 
3-03 
2.98 


3-96 
3-90 
3-84 
3-78 
3-73 


4.76 
4.68 
4.61 

4-54 
4-47 


5-55 
5-46 
5-38 
5-30 
5.22 


68 

69 
70 

71 
72 


47 
44 

42 

40 
38 


2.20 

2.17 
2.14 
2.1 1 
2.08 


2-94 
2.89 
2.85 
2.81 
2.77 


3-67 
3-62 

3-57 
3-52 
3-47 


4.41 

4-34 
4.28 
4.22 
4.16 


5-14 

5-07 

5 

4.92 

4.86 


73 

74 
75 
76 

77 


■36 
.35 


2.05 
2.02 


1-33 

2 

I-31 

1-97 

1.29 

1-94 

1.28 

1.92 

1.26 

1.89 

1-25 

1.87 

1.23 

1-85 

1.21 

1.82 

2-73 
2.70 

2.66 
2.63 
2.59 


3-42 

4.10 

3-37 

405 

3-33 

4 

3.28 

3-94 

3-24 

3-89 

3-20 

3-84 

3-16 

3-79 

3.12 

3-75 

3-08 

3-70 

304 

3-65 

4-79 
4.72 
4.66 
4.60 
4-54 


78 

79 
80 
81 
82 


2.56 

2.53 
2.50 
2.46 
2-43 


4-48 

4-43 
4-37 
4-32 
4.26 


83 
84 

85 
86 

87 


1.20 
1. 19 
1. 17 
i.t6 
1. 14 


1.80 

1.78 
1.76 
1.74 
1.72 


2.40 
2.38 

2.35 
2.32 
2.29 


3.01 
2-97 
2-94 
2.90 
2.87 


3.61 

3-57 
3-52 
3-48 
3-44 


4.21 
4.16 
4.11 
4.06 
4.02 


88 

89 
90 


I-I3 

1.70 

2.27 

2.84     1 

3-40 

3-97 

1. 12 

1.68 

2.24 

2.80 

3-37 

3-93 

I. II 

1.66 

2.22 

2.77 

3-33 

3-88 

252 


SMITH'S  FINANCIAL  DICTIONARY. 


Purchase  Price. 

91     

92     

93    

94    

95    

96    

97    

98    

99    

100    

101     

102    

103    

104    

105    

106    

107    

108    

109    

no     

111    

112     

113     

114     

115     

116     

117     

118     

119     

120      

121      

122     

123      

124     

125      

130     

135     

140     

145    

150    

155    

160    

165    

170    

175    

180 

185    

190    

195    

200    

210    

220    

225    

230    

240    

250    

275    

300    


I  per 
cent. 


.09 
.08 
.07 
.06 
05 
.04 

•03 
.02 
.01 

[ 

•99 
.98 

•97 
.96 

•95 

■94 
-93 
.92 
.91 
•90 
.90 
.89 
.88 

.87 
.86 

.86 

•85 
.84 
.84 

.82 
.81 
.81 
.80 
.80 

.76 
•74 
•71 
.68 
.66 

.64 
.62 
.60 

•58 

•57 

•55 
•54 

•51 
•50 

•47 
•45 
.44 
•43 
•41 
.40 
•36 
•.■^3 


1%  per 
cent. 


1.64 
1.63 
I.61 
1^59 
^•57 
1^56 
1^54 
1^53 
1^51 
150 
1.48 
1.47 

1-45 
1.44 
1.42 

1. 41 
1.40 
1^38 
1^37 
1^36 

1^35 
1^33 
1.32 

i^3i 
1^30 
1.29 
1.28 
1.27 
1.26 

1^25 

1.23 
1.22 
1.21 
1.20 
1.20 

i^i5 
I. II 
1.07 
1.03 
I 

•93 
.90 
.88 
•85 

.83 

.81 

•78 
•76 
•75 

•71 
.68 
f6 

•65 
.62 

.60 

•54 
•50 


2  per 
cent. 


2.19 

2.17 

2.IS 
2.12 
2.10 

2.08 
2.06 
2.04 
2.02 
2 

[.96 

[•94 
[.92 

[•90 
[.88 
[.86 
•85 
[.83 
[.81 

.80 
.78 
■77 
•75 
•73 

•72 
.70 
.69 
.68 
.66 

•65 
•63 
.62 
.60 
.60 

•53 
.48 
.42 
■27 
•33 

•29 

•25 
.21 

•17 
•  14 
.11 
.08 

•05 
.02 

.90 

.88 

.86 

■83_ 

.80 

.72 

.66 


■■'A   per 
cent. 


2.74 
2.71 

2.68 
2.65 
2.63 
2.60 
2.57 
2.55 
2.52 

2.50 

2.47 

2.45 
2.42 
2.40 
2.38 

2^35 
2.33 
2.31 
2.29 
2.27 
2.25 
2.23 
2.21 
2.19 
2.17 

2^15 

2.13 

2.II 
2.10 
2.08 

2.06 

2.04 

2.03 

2.01 

2 

1.92 

1.85 
1.78 
1.72 

1.66 
1.61 
^■56 

i^5i 
1.47 
1.42 

T^ 

1-35 
i^3i 
1.28 

JL25_ 

1. 19 

M3 
I. II 
1.08 
1.04 

I 

.90 
•83 


3   per 
cent. 


329 
3^26 
3.22 
3^i9 
3^15 
3.10 

3-09 
3.06 

3-03 
_3 

2.97 
2.94 
2.91 
2.88 
2.85 
2.83 
2.80 
2.77 

2.75 
2.72 

2.70 
2.67 
2.65 
2.63 
2.60 

2.58 
2.56 

2.54 
2.52 

2.50 
2.47 
2.45 
2^43 
2.41 
2.40 
2.30 
2.22 
2.14 
2.06 
2 

193 
1.87 
1.81 
1.76 

JLUL 
1.66 
1.62 

1^57 
1^53 
^•50 
1.42 
1-36 

1-33 
1.30 

1^25 

1.20 
1.09 
I 


3'A  per 
cent. 

3.84 

3^80 
376 
3-72 
3-68 

3^64 
3-6o 

3^57 
3^53 
3^50 
346 
3^43 
3-39 
3^36 
3-33 
3-30 
3^27 
3-24 
3.21 

3^i8 

3^15 
3.12 

3-09 
3^07 
3^04 
3^oi 
2.99 
2.96 
2.94 
2.91 

2.89 
2.86 
2.84 
2.82 
2.80 
2.69 

2^59 
2.50 
2.41 
2-33 
2.25 
2.18 
2.12 
2.0s 
2 

194 
1.89 
1.84 
1.79 
^•75 
1.66 
1-59 
1^55 

1-52 

^•45 
1.40 
1.27 
1. 16 


SMlTirs  fINANCIAL  DICTIONARY. 


253 


Purchase  Price. 


4  per 
cent. 


i,V2  per 
cent. 


5  per 
cent. 


hVi  per 
cent. 


6   per 
cent. 


6J4  per 
cent. 


10 

15 
20 
22 

24 


40 

26.66 
20 

18.18 
16.66 


45 

30 

22.50 

20.45 

18.75 


50 

33-33 

25 

22.72 

20.83 


55 
36.66 

27-50 

25 
22.91 


60 

40 

30 
27.27 

25 


65 

43-33 
32.50 

29-54 
27.08 


26 
28 
30 

34 


15-38 
14.28 

13-33 
12.50 
11.76 


17.30 
16.07 

15 
14.06 

13-23 


19.23 

17-85 
16.66 
15-62 
14.70 


21.15 
19.64 

18.33 
17.18 
16.17 


23-07 
21.42 
20 

18.75 
17.64 


25 
23.21 

21.66 
20.31 
19.11 


36 
38 

40 
42 
44 


46 

48 
50 
51 
52 


II. II 

10.52 

10 

9-52 

9.09 


12.50 
11.84 
11.25 
10.71 
10.22 


13-88 

13-15 
12.50 
11.90 
11.36 


15.27 
14.47 
13.75 
13.09 
12.50 


8.69 

8.33 
8 

7.84 
7.60 


9.78 
9-37 
9 
8.82 

8.65 


10.86 

10.41 

10 

9.80 

9.61 


11-95 

11.45 
II 

10.78 
10.57 


16.66 
15-78 

15 
14.28 

1304 

12.50 

12 

11.76 

11-53 


18.05 
17.10 

16.25 
15-47 
14-77 


14-13 

13-54 

13 

12.74 

12.50 


53 
54 
5^ 
56 
57 
58 

59 
60 
61 
62 

63 

64 

65 
(£ 

68 
69 
70 

71 
72 

73 
74 
75 
76 

n 
78 

79 
80 
81 
82 

83 

84 
85 

86 

88 
80 
90 


7-54 
7.40 

7.14 
7.01 

"6:89" 

6.77 
6.66 

6.55 
6.45 

6.34 
6.25 

6.15 
6.06 

5-97 

5.88 
5-79 
5-71 
5-63 

5-55 

5-47 
S-40 
5-33 
5.26 

5-19 

5-12 

5.06 

5 

4-93 

4-87 

4.81 

4.76 

4.70 

4-65 

4-59 

4-54 

4-49 

4-44 


8.49 
8.33 
8.18 
8.03 
7.89 

7-75 
7.62 

7-50 
7-37 
7-25 
7.14 

7-03 
6.92 
6.81 
6.71 

6.61 
6.52 
6.42 

6-33 
6.25 

6.16 

6.08 

6 

5-92 

5-84 

5-76 

5-69 

5-62 

5-55 
5-48 

5-42 
5-35 
5-29 
5-23 
5-17 

5-II 
505 

5 


9-43 
9-25 
9.09 
8.92 
8-77 
8.62 
8.47 
8.33 
8.19 
8.06 

7-93 
7.81 

7.69 
7-57 
7-46 

7-35 
7.24 
7.14 
7.04 
6-94 
6.84 
6.75 

6.57 
6.49 
6.41 
6.32 
6.25 
6.17 
6.09 

6.02 

"^.95 
5-88 
5-81 
5-74 
5-68 
5-61 
5-55 


10.37 
10.18 
10 
9.82 
9-64 
9.48 
932 
9.16 
9.01 
8.87 

8.73 
8.59 
8.46 

8.33 
8.20 

8.08 
7.97 
7.85 
7-74 

7-53 
7-43 
7-33 
7-23 

„ZiL4_ 
7-05 
6.96 
6.87 

6.79 
6.70 

"6:62" 

6.54 
6-47 
6.39 
6.32 

6.25 
6.17 
6.11 


11.32 

II. II 

10.90 

10.70 

10.52 

10.34 

10.16 

10 

9.83 

■  9.67 

9-52 

9-37 

9-23 

9.09 

8-95 

8.82 

8.69 

8.57 

8.45 

8.33 

8.21 

8.10 

8 

7-89 

7-79 

7.69 

7-59 

7-50 

7.40 

7-31 
7.22 
7.14 
7.05 
6.97 
6.89 
6.81 

6.74 
6.(^ 


12.26 

12.03 
11.81 
11.60 
11.40 

11.20 
1 1. 01 
10.83 
10.65 
10.48 
10.31 
10.15 
10 
9.84 
9-70 

9-55 
9.42 
9.28 

9-15 
9.02 

8.90 
8.78 
8.66 
8.55 
8.44 

8.33 
8.22 
8.12 
8.02 
7-92 

7.83 
7.73 
7.64 

7-55 
7-47 
7.38 
7-30 
7.22 


^34 


SMITH'S  FINANCIAL  DICTIONARY. 


Purchase  Price. 


4  per 
cent. 


4/2  per 
cent. 


5  per 
cent. 


S'A  per 
cent. 


6  per 
cent. 


6M  per 
cent. 


91 
92 

93 
94 

95 


4-39 

4-34 
4-30 

4-25 
4.21 


4-94 
4.89 
4-83 
478 
473 


5-49 
5-43 
5-37 
5-31 
5.26 


6.04 
5-97 
5-91 
5-85 
578 


6.59 
6.52 

6.4s 
6.38 
6.31 


7.14 
7.06 
6.98 
6.91 
6.84 


96 
97 
98 

99 
100 


lOI 

102 
103 
104 
105 


106 
107 
108 
109 
no 


III 

112 
113 
114 


116 
117 
118 
119 
120 


121 
122 
123 

124 
125 


130 

135 
140 

145 


160 

165 
170 

175 


180 

185 
190 

195 
200 


210 
220 
225 
230 
240 


250 

275 
300 


4.16 
4.12 
4.08 
4.04 

4 


4.68 

5-20 

463 

S-iS 

4-59 

5-10 

4-54  • 

505 

4-50 

5 

3-96 

3-92 
3-88 

3.84 
3-80 


4-45 
4.41 

4-36 
4-32 
4.28 


377 
373 
370 
3-66 
3-63 


3-6o 

3-57 
3-54 
350 
3-47 


3-M- 
3-41 
3.38 
336 
3-33 


4.24 
4.20 
4.16 
4.12 
4.09 


4-05 
4.01 

3-98 
3-94 
3-91 


4-95 
4.90 

4.85 
4.80 

476 


471 
4.67 
4.62 
4-58 
4-54 


572 
5-67 
5-6i 
5-55 
5-50 


6.25 
6.18 
6.12 
6.06 
6 


5-44 
5-39 
5-33 
5-28 

5-23 


4-50 
4.46 
4.42 
4.38 
4-35 


5.18 
5-14 
509 
5-04 
5 


S-94 
5-88 
5-82 
576 
571 


4-95 
4.90 
4.86 
4.82 
478 


3.87 

4-31 

474 

3-84 

4.27 

470 

3.81 

4-23 

4.66 

378 

4.20 

4.62 

375 

4.16 

4-58 

330 

3-27 
3-25 
3.22 
3.20 


371 
3-68 

3-65 
3.62 
3.60 


4-13 
A.09 
4.06 
4-03 
4 


"•54 
4-50 
4-47 
4-43 
4.40 


5-66 
5.60 

5-55 
5-50 

5-45 


5-40 
5-35 
5-30 
5.26 

5-21 


5-17 

5-12 

5-o8 
5-04 
5 


3-08 
2.96 
2.8s 

275 
2.66 


2.58 
2.50 
2.42 

2.35 
2.28 


3-46 

3.84 

3-33 

370 

3.21 

3-57 

3.10 

3-44 

3 

3-33 

2.90 

2.81 

2.72 
2.64 

2.57 


4-23 
4.07 

392 
379 
3.06 


3.22 

3.12 

303 
2.94 
2.85 


3-54 
3-43 
3-33 
3-23 
3-14 


4-95 
4.91 

4.87 

4-83 
4.80 


4.61 

4-44 
4.28 

4-13 
4 


3-87 
375 
3-63 

3-52 
3-42 


2.22 
2.16 
2.10 
2.05 

2 


1.90 
I.81 
177 
173 

1.66 


2.50 

2.43 
2.36 
2.30 
2.25 


2.77 
2.70 
2.63 
2.56 
2.50 


305 
2.97 
2.89 
2.82 
275 


2.14 

2.04 

2 

1.97 

1.87 


2.38 
2.27 
2.22 
2.17 
2.08 


2.61 

2.50 
2.44 

2.39 
2.29 


3-33 
3-24 
3-15 
307 
3 


2.85 
2.72 
2.66 
2.60 
2.50 


1.60 

1.4; 
1-33 


1.80 
1.63 
1.50 


2 

i.8r 
1.66 


6.77 
6.69 
6.63 
6.56 
6.50 


6.43 
6.37 
6.31 
6.25 
6.19 


6.13 
6.07 
6.01 
5-96 
590 


S-85 
580 

575 
570 
5.65 


5.60 

5-55 
5-50 
546 
541 


5-37 
532 
5-28 

5-24 

5-20 

5 

4.81 

4.64 

4.48 

4-33 

4.19 

4.06 

3-93 
382 

371 


3.61 

351 

3-42 
3-33 
3-25 


309 
2.95 
2.88 
2.82 
2.70 


2.60 
2.36 
2.16 


SMITH'S  FINANCIAL  DICTIONARY. 


255 


Purchase  Price. 


7  per 
cent. 


7  3-'o 
per  cent. 


I'A  per 
cent. 


8  per 
cent. 


8^  per 
cent. 


9  per 
cent. 


10 

15 
20 
22 
24 
26 
28 
30 
32 

34 
36 
38 
40 

42 
44 
46 
48 
SO 
SI 
52 

S3 

S4 
S5 
S6 
S7 
S8 

59 
60 
61 
62 

63 
64 

6S 
66 

68 

69 
70 

71 
72 

73 

74 
75 
76 
77 
78 
79 
80 
81 
82 

83 
84 
85 
86 

88 

89 
90 


70 
46.66 

35 

31.81 

29.16 


26.92 

25 

23.33 
21.87 
20.58 


73 

48.66 

36.50 

33.18 

30.41 


75 

SO 

37-50 

3409 

31.25 


80 

53.33 
40 

36.36 
33-33 


28.07 
26.07 

24-33 
22.81 
21.47 


28.84 

26.78 

25 

23.43 

22.05 


30-76 
28.57 
26.66 

25 
23-52 


85  ■ 
56.66 

42.50 
38.63 
35-41 


32.69 
30.35 
28.33 
26.56 

25 


90 

60 

45 
40.90 

37-50 


34-6i 

32.14 

30 

28.12 

26.47 


19.44 
18.42 
17.50 
16.66 
15.90 


20.27 
9.21 
8.25 
7.38 
6.59 


20.83 
19.73 
18.75 
17.85 
17.04 


22.22 

21.05 

20 

9.04 

8.18 


23.61 
22.36 

21.25 

20.23 

9.31 


25 

23.68 

22.50 

21.42 

20.45 


15.21 

14.58 

14 
13.72 

13.46 


5-86 
5.20 
4.60 
4.31 
4.03 


16.30 
15.62 

15 

14.70 

14.42 


7-39 
6.66 
6 
5.68 

18.47 
17.70 

17 
16.66 

S.38 

16.34 

956 

8.75 
8 

7.64 
7.30 


13.20 
12.96 
12.72 
12.50 
12.27 


3-77 
3.51 
Z-27 
303 
2.80 


14. 1  q 
13.88 
13.63 
13.39 
13.15 


S.09 

4.81 

4.54 
4.28 

4.03 


6.03 

5.74 
5.45 
5-17 
4.91 


6.98 

6.66 
6.36 
6.07 
S.78 


12.06 
11.86 
11.66 
11.47 
11.29 


2.58 

2.37 
2.16 

1-95 
1-77 


12.93 
12.71 
12.50 
12.39 
12.09 


3-79 

3-55 
3-33 
3.11 
2.90 


4.65 
4.40 
4.16 

3.93 
3.70 


5.51 

5.25 

5 

4.75 

4-51 


II. II 
10.93 
10.76 
10.60 
10.44 


1.58 
1.40 
1.23 
1.06 
0.89 


11.90 
11.68 

11-53 
11.36 
II. 19 


2.69 
2.50 
2.30 
2.12 
1-94 


3-49 
3-28 

307 
2.87 
2.68 


4.28 
4.06 
3.84 
363 
3-43 


10.29 
10.14 
10 

9-85 
9.72 


0.73 
0.57 
0.42 
0.28 
0.13 


11.02 
10.86 
10.71 
10.56 
10.41 


1.76 
1-59 
1-43 
1.26 
I. II 


2.50 
2.31 
2.14 

1-97 
1.80 


323 
3-04 
2.85 
2.67 
2.50 


958 
9.4s 
9.33 
9.21 

9.09 


0 
9.86 

9-73 
9.60 

9.48 


10.27 

10.13 

10 

9.86 

9-74 


0.95 
0.80 
0.66 
0.52 
0.38 


1.63 
1.49 

1.33 
1. 18 
1.03 


2.32 

2.16 

2 

1.84 

1.68 


8.97 
8.86 

8.75 
8.64 

8.53 


9.35 
9.24 
9.12 
9.01 
8.90 


9.61 
9.49 
9.37 
925 
9.14 


0.25 

0.12 

0 

9.87 

975 


0.89 

0.75 
0.62 
0.49 
0.36 


1.53 
1-39 
1.25 
I. II 

0.97 


8.43 
8.33 
8.23 

8.13 
8.04 


8.79 
8.69 
8.58 
8.48 
8.39 


9.03 
8.92 
8.82 
8.72 
8.62 


9.63 
9.52 
9.41 
9.30 
9.19 


0.24 
0.1 1 
0 

9.88 
9.77 


0.84 
0.71 
0.58 
0.46 
0.34 


7.94 
7.86 

7-77 


8.29 
8.20 
8.11 


8.52 
8.42 
8.33 


9.09 
8.98 
8.88 


9.65 
9-55 
9.44 


0.22 

O.II 

0 


2^6 


SMITH'S  FINANCIAL  DICTIONARY. 


Purchase  Price. 


7  per 
cent. 


7  3-IO 
per  cent. 


7>^  per 
cent. 


8  per 
cent. 


iVi  per 
cent. 


9  per 
cent. 


91 
92 

93 
94 
95 
96 

97 
98 

99 
100 

lOI 

102 
103 
104 
105 
106 
107 
108 
109 
no 
III 

112 

113 
114 

116 
117 
118 
119 
120 

121 
122 
123 
124 
125 
130 

135 
140 

I4S 
150 

15s 
160 
i6^ 
170 
17=^ 
180 

185 
190 

195 
200 

210 
220 
225 
230 
240 
250 

275 
300 


7.69 
7.60 

7-52 
7-44 
7-36 


8.02 
7-93 
7.84 
7.76 
7.68 


8.24 

8.15 
8.06 

7-97 
7.89 


8.79 
8.69 
8.60 

8.51 
8.42 


9-34 
923 
9-13 
9.04 

8.94 


9.89 

9.78 
9.67 
9-57 
9-47 


7.29 
7.21 

7-14 
7.07 

7 


7.60 

7-52 
7-45 
7-Z7 
7-30 


7.81 
7-72, 
7-65 
7-57 
7-50 


8.33 
8.24 
8.16 
8.08 
8 


8.85 
8.76 
8.67 
8.58 
8.50 


9-37 
9.27 
9.18 
9.09 
9 

8.91 
8.82 

8.73 
8.65 
8.57 


6.93 
6.86 

6.79 
6.72 
6.66 


7.22 

7.42 

7-15 

7-35 

7.08 

7.28 

7.01 

7.21 

6.95 

7.14 

7.92 

7.84 

7.y6 
7.69 
7.61 


8.41 

8.33 
8.25 
8.17 
8.09 


6.60 

6.54 
6.48 
6.42 
6.36 


6.88 
6.82 

6.75 
6.69 
6.63 


7.07 

7 

6.94 
6.88 
6.81 


7-54 
7-47 
7.40 

7-33 
7.27 


8.01 
7-94 
7.87 
7-79 
7.72 


8.49 
8.41 

8.33 
8.25 
8.18 


6.30 
6.25 
6.19 
6.14 
6.08 


6.57 
6.51 
6.46 
6.40 
6.34 


6.75 
6.69 
6.63 

6.57 
6.52 


7.20 
7.14 
7.07 
7.01 
6.95 


7-65 
7.58 
7-52 
7-45 
7-39 


8.10 
8.03 
7.96 
7.89 
7.82 


6.03 
5-98 
5-93 
5-88 

5-83 


6.29 
6.23 
6.18 

6.13 
6.08 


6.46 
6.41 

6.35 
6.30 
6.25 


6.89 
6.83 

6.77 
6.72 
6.66 


7-32 
7.26 
7.20 

7.14 
7.08 


7-75 
7.69 
7.62 
7-56 
7-50 


5.78 
5-73 
5-69 
5.65 
5.60 


6.03 

5-98 
5-93 
5-88 
5-80 


6.19 
6.14 
6.09 
6.04 
6 


6.61 

6.55 
6.50 

6.45 
6.40 


7.02 
6.96 
6.91 
6.85 
6.80 


7-43 

7-37 
7-31 
7-25 
7.20 


5.38 

5.61 

5.18 

5-33 

5 

5.21 

4.82 

5-03 

4.66 

4.86 

576 

5-55 
5-35 
5-17 
5 


6.15 
5-92 
571 
5-51 
5-33 


6.53 
6.29 
6.07 
5-86 
5.66 


6.92 
6.66 
6.42 
6.20 
6 


4.51 
4-37 
4.24 
4.11 
4 


4.70 

4-56 
4.42 
4.29 
4.17 


4.83 
4.68 

4-54 
4.41 

4-23 


5.16 
5 

4.84 
4.70 

4-57 


5.48 

S-3I 

5-15 

5 

4.85 


5-80 
5.62 
5-45 
529 
5.14 


3.88 
3.78 
3-68 
3.58 
3-50 


4-05 
3-94 
3.84 
3-79 
3.65 


4.16 
4-05 
3-94 
3-84 
3-75 


4-44 
4-32 
4.21 
4.10 
4 


3-33 

3.18 
311 
3-04 
2.91 


3-47 
3-31 
324 
3-17 
3-04 


3-57 
3-40 
3-33 
3.26 
3.12 


3-80 
363 
3-55 
3-47 
3-33 


4.72 
4-59 
4-47 
4-35 
4-25 


4.04 
3-86 
3-77 
369 
3-54 


5 
4.86 

4-73 
4.61 

4:5^ 

4.28 

4.09 

4 

391 

3-75 


2.80 

2.54 
2.33 


2.92 
2.65 
2.40 


3 

3-20 

2.72 

2.90 

2.50 

2.66 

3.40 
309 
2.83 


360 

327 

3 


SMITH'S  FINANCIAL  DICTIONARY. 


257 


Purchase  Price. 


9M  per 
cent. 


10  per 
cent. 


II  per 
cent. 


12  per 
cent. 


15  per 
cent. 


20  per 
cent. 


10 

15 
20 
22 

24 
26 
28 
30 
32 

34 
36 
38 
40 
42 
44 

46 
48 
50 
SI 
52 

53 

54 
55 
56 
57 
58 

59 
60 
61 

_^ 
63 
64 

65 
66 

_67 
68 
69 
70 

71 
72 

73 
74 
75 
76 

78 
79 
80 
81 
82 

83 
84 
85 
86 

88 

89 
90 


95 

6333 

4750 

43-18 

3958 


100 
66.66 
50 

45-45 
41.66 


no 

73-13 
55 
50 
45-83 


120 
80 
60 

54-54 
50 


150 
100 

75 

68.18 

62.50 


200 

133-33 

100 
90.90 
83-33 


36.53 

31.66 
29.68 
27.94 


38.46 
35-71 
33-33 
31-25 
29.41 


42.30 
39.28 
36.66 
34-37 
32.35 


46.15 

42.85 

40 

37-50 

35-29 


57-69 

53-57 

50 

46.87 

44.11 


76.92 
71.42 
66.66 
62.50 
58.82 


26.38 
25 

23-75 
22.61 

21.59 


27.77 
26.31 

25 

23.80 

22.72 


30.55 
28.94 
27,50 
26.19 
25 


33-33 

31-57 

30 

28.57 

27-27 


41.66 
39-47 
37-50 
35-71 
34-09 


55-55 
52.63 
50 
47.61 

45-45 


20.65 
9-79 
9 

8.62 
8.26 


21.73 

20.83 

20 

9.60 

9-23 


7.92 
7-59 

7-27 
6.96 
6.66 


8.86 
8.51 
8.18 

7-85 
7-54 


23.91 

22.91 

22 

21.56 

21.15 


26.08 

25 

24 

23-52 

23.07 


20.75 

20.37 

20 

19.64 

19-29 


22.64 
22.22 

21.81 
21.42 
21.05 


32.60 
31.25 
30 

29.41 
^8^_ 
28.30 
27.77 
27.27 
26.78 
26.31 


43-47 
41.66 

40 

39.21 

38.46 


37-73 

37-03- 

36.36 

35-71 

35-08 


6.37 
6.10 

5-83 
5-57 
5-32 


7-24 
6.94 
6.66 

6.39 
6.12 


18.96 
18.64 
18.33 
18.03 
17-73 


20.68 

20.33 

20 

19.67 

19-35 


25.86 

25.42 
25 

24-59 
24.19 


34-48 
33-80 

33-33 
32-78 
32.25 


5-07 
4-84 
4.61 

4-39 
4.17 


S-87 

5.62 

5-38 
5-15 
4-92 


17.46 
17.18 
16.92 
16.66 
16.41 


19.04 

18.75 
18.46 
18.18 
17.91 


23.80 

23.43 
23.07 
22.72 
22.38 


31.74 
31-25 
30.76 
30.30 
29.85 


3.97 
3-76 
3-57 
3-38 
3-19 


4.70 

4-49 
4.28 
4.08 
3-89 


16.17 
15-94 
15-71 
15-49 
15-28 


17-64 

17-39 
17.14 
16.90 
16.66 


22.05 

21.73 
21.42 
21.12 
20.83 


29.41 
28.98 

28.57 
28.16 

27.77 


3.01 
2.83 
2.66 
2.50 
2.33 


369 
3-51 
3-33 
3-15 
2.98 


15.06 
14.86 
14.66 

14-47 
14.27 


16.43 

16.21 

16 

15-78 

15-58 


20.54 
20.27 
20 

19-73 
19.48 


27-39 
27.02 
26.65 
26.31 
25-97 


2.17 
2.02 
1.87 
1.72 
1.58 


2.82 
2.65 
2.50 

2.34 
2.19 


14.10 
13.92 

13-75 
13-58 
13-41 


15-38 
15-18 

15 
14.81 

1463 


19.23 
18.98 
18.75 
18.51 
18.29 


25.64 

25-31 

25 

24.69 

24-39 


1-45 
1.30 
1. 17 
1.04 
0.91 


2.04 
1.90 
1.76 
1.62 
1-49 


13-25 
13.09 
12.94 
12.79 
12.64 


0.79 
0.67 

0.55 


1.36 
1.23 
I. II 


12.50 

12.35 
12.22 


14-45 
14.28 
14.11 
1395 
13-79 


18.04 

17-85 
17.64 

17-44 
17.24 


13-63 
1348 
13-33 


17.04 
16.85 
16.66 


24.09 
23-80 
23-52 
23-25 
22.98 


22.72 
22.47 
22.22 


258 


SMITH'S  FINANCIAL  DICTIONARY. 


Purchase  Price. 


9K  per 
cent. 


10  per 
cent. 


II  per 
cent. 


12  per 
cent. 


15  per 
cent. 


20  per 

cent. 


91 
92 

93 
94 
95 
96 

97 
98 

99 
100 

lOI 

102 
103 
104 
105 
106 
107 
108 
109 
no 
III 

112 

113 
114 

116 

117 
118 
119 
120 

121 
122 
123 
124 
125 
130 

140 

ISS 
160 

i6s 
170 

175. 

180 

i8s 
190 

195 
200 

210 
220 

225 
230 
240 
250 

275 
300 


10.44 
10.32 
10.21 
10.10 
10 


10.98 
10.86 

10.7s 
10.63 
10.52 


12.08 

11-95 
11.82 
11.70 
11-57 


3-18 

3-04 
2.90 
2.76 
2.63 


16.48 
16.30 
16.12 

15-95 
15-78 


21.97 
21.73 
21.50 
21.27 
21.05 


9-89 
9-79 
9.69 

9-59 
9-50 


10.41 
10.30 
10.20 
10.10 
10 


11.46 

11-34 
11.22 
II. II 
II 


2.50 

2.37 
2.24 
2.12 
2 


15-72 
15-46 
15-30 
15-15 
15 


20.83 
20.61 
20.40 
20.20 
20 


9.40 

9-31 
9.22 

9-13 
9.04 


9-90 
9.80 

9-70 
9.61 
9-52 


10.89 
10.78 
10.67 

10.57 
10.47 


1.88 
1.76 
1-65 

1-53 
1.42 


14.85 
14.70 
14-56 
14.42 
14.28 


19.80 
19.60 
19.41 
19.23 
19.04 


8.96 
8.87 
8.79 
8.71 
8.63 


9-43 
9-34 
9-25 
9.17 
9.09 


10.37 
10.28 
10.18 
10.09 
10 


1.32 
1.21 
I. II 
I 
0.90 


14-15 
14.01 

13-88 
13.76 
13-63 


18.86 
18.69 
18.51 

18.34 
18.18 


8.55 
8.48 
8.40 

8.33 
8.26 


9 

8.92 
8.84 

8.77 
8.69 


9.90 
9.81 

9-73 
9.64 

9-56 


0.81 
0.71 
0.61 
0.52 
0.43 


13-51 
13-39 
13-27 
13-15 
1304 


18.01 
17-85 
17.69 
17-54 
17-39 


8.18 

8.II- 

8.05 

7.98 

7.91 


8.61 
8.54 
8.47 
8.40 

8.33 


9-48 
9.40 
9-32 

9-24 
9.16 


0.34 
0.25 

0.16 
0.08 
0 


12.93 
12.83 
12.71 
12.60 
12.50 


17.24 
17.09 
16.94 
16.80 
16.66 


7-85 

8.26 

9-09 

7-78 

8.19 

9.01 

7-72 

8.13 

8.94 

7.66 

8.06 

8.87 

7.60 

8 

8.80 

9.91 

9-83 

9.76 
9.67 

9.60 


12.39 

12.29 
12.19 
12.09 

12 


16.52 

16.39 
16.26 
16.12 
16 


7-30 

7-03 
6.78 

6.55 
6-33 
6.12 

5-93 
5-75 
5.58 

5-42 

5-27 

5-13 

5 

4.87 

4-75 

4-52 

4-31 

4.22 

4-13 
3-90 

3-80 

3-45 
3.16 


7.69 
7.40 
7.14 
6.89 
6.66 

6-45 
6.25 
6.06 
5-88 
5-71 

5-55 
5-40 
5.26 

5-13 

J 

4.76 

4-54 
4.44 

4-34 
4.16 

"4 
363 
3-33 


8.46 
8.14 
7.8s 
7-58 
7-33 
7.09 
6.87 
6.66 

6.47 
6.28 

6.11 

5-94 

5.78 

5-64 

5-50 

5-23 

S 

4.88 

4-78 
4-58 

4.40 

4 
3-66 


9-23 

8.88 

8.57 
8.27 
8 

7-74 
7-50 
7.27 

7-05 

6.66 
6.48 
6.31 

6.15 
_6 

5-71 

5-45 
5-33 

5-21 

J 

4.80 
436 
4 


11-53 
II. II 
10.71 
10.34 
10 

9-67 
9-37 
9.09 
8.82 
8-57 

8.33 
8.10 

7-89 
7.69 
7-50 

7-14 
6.81 
6.66 
6.52 
6.25 

6 

5-45 
5 


15-38 
14.81 
14.28 
13-79 
13-33 
12.90 
12.50 
12.12 
11.76 
11.42 

II. II 
10.81 
10.52 

10.25 

10 

"9^52" 
9.09 

8.88 

8.69 

8-33 

8 

7-27 
6.66 


SMITH'S  FINANCIAL  DICTIONARY.  259 

Income  tax.  A  tax  levied  upon  the  income  or  profits  of  an 
individual.     Such  a  tax  is  levied  in  Great  Britain. 

Inconvertible  money.  Money  which  is  simply  a  promise  to 
pay  and  without  either  gold  or  silver  back  of  it  into  which  it 
can  be  converted. 

Incorporation.  In  its  business  application  incorporation  is 
the  procuring  by  a  joint-stock  company  of  the  authority  of  the 
law  to  carry  on  business.  See  Articles  of  incorporation ;  also 
see  Charter. 

Indent.  Name  for  an  order  sent  abroad  for  goods,  contain- 
ing particulars  as  to  its  execution,  together  with  terms  and 
conditions  upon  which  it  is  given. 

Indenture.     A  contract  under  seal. 

Independent  Treasury  system.  After  the  removal  of  the 
funds  of  the  Federal  government  from  the  Bank  of  the  United 
States  in  1833  public  moneys  were  deposited  in  selected  state 
banks  icalled  "pet  banks"  by  the  opponents  of  the  administra- 
tion). The  results  were  entirely  unsatisfactory.  Large  losses 
were  suffered  by  the  government  and  both  political  and  busi- 
ness chaos  followed. 

Finally,  in  1840,  an  act  was  passed  making  the  government 
the  actual  custodian  of  its  own  moneys.  Vaults  and  safes 
were  provided  for  the  Treasury  at  Washington,  Sub-Treas- 
uries were  established  in  several  of  the  larger  cities  and  mints 
and  branch  mints  were  made  places  of  deposit.  The  law 
was  repealed  in  1841  and  reenacted  in  1846.  In  the  interim 
the  funds  were  handled  under  the  independent  Treasury  sys- 
tem \vit]T.)ut  the  authority  of  law. 

From  1846  the  system  was  exclusively  in  operation  until 
1863  when  the  national  banking  act  was  passed.  This  law  did 
not  change  the  principle  of  the  system,  which  is  still  in  opera- 
tion, but  modified  it  to  the  extent  that  national  banks  could 
become  depositories  of  public  funds  upon  supplying  United 
States  bonds  as  security  in  the  full  amount  of  the  money  de- 
posited with  them. 

The  system  has  been  entirely  successful  so  far  as  safety  is 
concerned,  but  the  locking  up  of  such  large  amounts  of  money 
as  the  government  always  keeps  on  hand  has  been  a  distinct 
economic  loss    and  in  times  of  monetary  stringency  an  enor- 


26o  SMITH'S  FINANCIAL  DICTIONARY. 

mous  Treasury  surplus  has  been  an  actual  menace  to  the  busi- 
ness of  the  country. 

India  Council  bill.  A  draft  (bill  of  exchange)  on  (payable 
in)  India  issued  by  the  India  Council,  the  body  or  commis- 
sion   which  manages  the  business  affairs  of  India  in  London. 

The  revenues  of  India  are  collected  in  silver  rupees  (nomi- 
nally worth  2  shillings  or  48.6  cents,  but  officially  rated  as 
worth  16  pence  or  32.44  cents)  ;  but  much  of  the  expenditures 
of  India,  including  the  interest  on  its  debt,  has  to  be  paid  in 
sovereigns  in  Great  Britain.  The  India  Council,  therefore,  by 
means  of  Council  bills  exchanges  some  of  its  rupees  in  India 
for  gold  in  London.  On  the  other  hand,  merchants  in  Lon- 
don who  import  Indian  products,  for  which  they  have  to  pay 
rupees  in  India,  exchange  their  gold  in  London  for  rupees  in 
India — that  is,  with  their  gold  they  buy  India  Council  bills, 
which  are  payable  in  rupees  in  India. 

Remitters  to  India  (those  who  have  obligations  to  meet  in 
India)  are  given  an  opportunity  every  Wednesday  by  the 
India  Council  to  tender  (bid)  for  Council  bills.  The  bills  are 
allotted  (sold)  to  those  who  pay  the  highest  prices  for  them. 
Some  of  the  allotments  are  in  telegraphic  transfers,  as  distin- 
guished from  bills — that  is,  the  Council  orders  by  cable  the 
immediate  payment  in  India  of  these  allotments.  In  allot- 
ment di  bills  the  order  for  payment  is  forwarded  by  mail. 
Telegraphic  transfers  bring  a  fractionally  higher  price  than 
bills.  Special  allotments  are  made  at  times  other  than  the 
regular  Wednesday  meeting  of  the  Council. 

India  Council  draft.  Same  as  India  Council  bill ;  see  India 
Council  bill. 

India  Council  remittance.  A  bill  of  exchange  or  a  tele- 
graphic transfer  payable  in  India  which  is  sold  by  the  India 
Council.     For  information  see  India  Council  bill. 

India  rupee  paper.  Designation  for  the  promissory  notes 
issued  by  the  Indian  government  the  interest  on  which  is 
payable  by  drafts  on  India.  When  they  bear  on  their  face 
notification  that  interest  (in  the  form  of  drafts  on  India)  can 
be  collected  at  the  Bank  of  England  they  are  termed  enfaced 
paper.  These  drafts  are  readily  bought  by  parties  having  re- 
mittances to  make  to  India. 


SMITH'S  FINANCIAL  DICTIONARY.  261 

Indicator.  Commonly  called  the  ticker;  the  machine  oper- 
ated by  electricity  which  prints  the  quotations  of  stocks,  grain, 
cotton,  etc.,  on  a  paper  tape. 

Also,  an  automatic  apparatus  by  which  prices  are  thrown 
into  view  is  called  an  indicator.  Such  an  apparatus  is  some- 
times used  in  reporting  prices  in  grain  and  oil  (petroleum) 
markets. 

Indirect  exchange.  Exchange  between  three  or  more  places. 
For  instance,  a  person  in  New  York  who  desires  to  make 
a  remittance  to  Chicago  may  find  it  advantageous  to  buy 
a  draft  (bill  of  exchange)  on  St.  Louis  and  with  this  draft 
purchase  in  St.  Louis  a  draft  on  Chicago.  Again,  a  person  in 
New  York  who  desires  to  make  a  remittance  to  London  may 
find  it  advantageous  to  buy  a  bill  of  exchange  (draft)  on 
Paris  and  with  this  bill  purchase  in  Paris  a  bill  on  London. 
For  additional  information  see  Arbitration  of  exchange. 

Direct  exchange  is  when  only  two  places  are  involved ;  see 
Direct  exchange. 

Indorsed  bond.  A  coupon  bond  issued  to  bearer  upon 
which  has  been  placed  an  indorsement  not  properly  pertain- 
ing to  it  must,  according  to  New  York  Stock  Exchange  rules, 
be  sold  specifically  as  an  indorsed  bond  and  is  not  a  delivery 
except  as  an  indorsed  bond. 

Any  indorsement  on  a  coupon  bond  stating  that  it  has  been 
deposited  as  security  for  bank  circulation  or  for  insurance  re- 
quirement may  be  released  by  an  acknowledgment  of  the  re- 
lease before  a  notary  public ;  it  will  then  be  a  delivery  in  ac- 
cordance with  New  York  Stock  Exchange  rules  as  a  released 
indorsed  bond. 

Sometimes  the  owner  of  a  coupon  bond  inscribes  the  fact 
of  his  ownership  on  the  bond,  as,  for  instance,  "This  bond 
is  the  property  of  John  Jones."  In  such  a  case  in  making  a 
change  in  the  ownership  of  the  bond  a  formal  assignment  of  it 
in  blank  must  be  executed  by  the  owner  and  it  then  may  be 
sold  under  the  New  York  Stock  Exchange  rules  specifically  as 
a  released  indorsed  bond. 

Indorsee.  One  to  whom  transfer  by  indorsement  is  made. 
For  additional  information  see  Indorsement. 


262  SMITH'S  FINANCIAL  DICTIONARY. 

Indorsement.  A  guarantee  of  payment  of  a  promissory 
note,  check,  draft  (bill  of  exchange),  etc. 

In  some  cases,  as  where  indorsed  for  collection,  only  the 
genuineness  of  the  signature  is  guaranteed.  When  applied  to 
negotiable  instruments  the  term  indorsement  means  an  in- 
dorsement completed  by  delivery  of  the  instrument. 

An  indorser  of  a  negotiable  instrument  contracts  with  the 
present  holder  or  any  future  holder  that  if  the  maker  does 
not  pay  it  he  (the  indorser)  will  if  it  is  duly  protested  for 
non-payment   and  notice  of  the  protest  is  sent  to  the  indorser. 

An  indorser  is  wholly  discharged  if  the  instrument  is  not 
properly  protested  or  if  the  security  held  for  it  is  released  or 
not  properly  protected  or  if  the  time  for  payment  is  extended 
without  the  indorser's  assent  or  if  the  maker  or  any  preced- 
ing indorser  pays  it  after  it  is  due. 

When  an  indorser  writes  above  his  indorsement  (signature) 
"Protest  waived"  the  necessity  of  protesting  the  instrument 
to  hold  the  indorser  is  dispensed  with. 

Indorsement  must  be  on  the  paper  so  long  as  there  is  room 
on  the  back  or  front ;  when  there  is  no  room  it  may  be  placed 
on  a  piece  of  paper,  designated  allonge,  attached  to  the  instru- 
ment. 

Indorsement  of  a  negotiable  instrument  which  is  in  the 
hands  of  another  is  evidence  that  the  indorser  has  surrendered 
his  ownership  of  it. 

Indorsers  are  liable  to  each  other  in  the  order  in  which  their 
indorsements  appear  on  the  instrument  (unless  they  have 
made  a  specific  agreement  to  the  contrary).  In  other  words, 
each  indorser  is  liable  for  the  full  amount  of  the  instrument  to 
any  of  the  indorsers  whose  names  are  written  under  (fol- 
lowing) his ;  but  he  is  not  liable  to  any  indorser  whose  name  is  ■ 
written  above  (preceding)  his.  The  holder  may  proceed 
against  any  of  the  indorsers  regardless  of  their  liability  as 
between  themselves. 

A  note  or  other  negotiable  instrument  may  be  indorsed  in 
nine  different  ways,  each  imposing  a  different  liability  on  the 
indorser. 

An  indorsement  in  full  (i),  another  name  for  which  is  spe- 
cial indorsement,  specifies  by  name  the  person  in  whose  favor 


SMITH'S  FINANCIAL  DICTIONARY.  263 

it  is  made  and  to  whom  or  to  whose  order  the  payment  is  to 
be  made. 

An  indorsement  in  blank  (2)  consists  merely  of  the  name 
of  the  indorser  written  on  the  back  of  the  instrument.  The 
receiver  of  a  negotiable  instrument  indorsed  in  blank  or  any 
bona  fide  holder  of  it  may  write  over  it  an  indorsement  in  full 
to  himself  or  to  another  or  any  contract  consistent  with  the 
character  of  an  indorsement,  but  he  cannot  enlarge  the  liability 
of  the  indorser  in  blank  by  writing  over  it  a  waiver  of  any  of 
his  rights,  such  as  demand  and  notice. 

An  absolute  indorsement  (3)  binds  the  indorser  to  pay  on 
no  other  condition  than  the  failure  of  the  prior  parties  to  do 
so  and  on  due  notice  to  him  of  their  failure. 

A  conditional  indorsement  (4)  contains  some  condition  to 
the  indorser's  liability. 

An  indorsement  may  be  so  worded  as  to  restrict  the  further 
negotiability  of  the  instrument ;  it  is  then  a  restrictive  in- 
dorsement (5).  The  words  "For  collection"  written  on  a 
note  render  the  indorsement  restrictive.  The  indorser  in 
such  a  case  may  hold  that  he  is  not  the  owner  of  the  note  and 
did  not  mean  to  give  a  title  to  it  or  to  its  proceeds  when  col- 
lected ;  such  an  indorsement  merely  makes  the  indorsee  agent 
for  the  indorser  in  collecting  the  note. 

A  qualified  indorsement  or  indorsement  without  recourse 
(6)  consists  in  writing  the  words  "Without  recourse  to"  or  "At 
the  indorsee's  own  risk"  on  the  back  of  the  note ;  the  indorser 
is  then  a  mere  assignor  of  the  title  to  the  note  and  is  relieved 
of  responsibility  for  its  payment. 

A  joint  indorsement  (7)  is  an  indorsement  on  a  promissory 
note  that  is  payable  to  two  or  more  persons  who  are  not  part- 
ners. 

Successive  indorsement  (8)  is  made  by  several  persons  the 
legal  efifect  being  to  subject  each  of  them  to  each  other  in  the 
order  in  which  they  indorse;  the  indorsement  imparts  several 
and  successive,  but  not  joint  obligation. 

Irregular  indorsement  (9)  may  originate  in  any  of  several 
ways.  But  in  every  case  an  indorser  guarantees  the  genuine- 
ness of  all  preceding  signatures. 

In  order  to  hold  the  indorser  of  a  check  it  should  be  presented 


264  SMITH'S  FINANCIAL  DICTIONARY. 


to  the  bank  for  collection  the  day  it  is  received  by  the  payee 
(the  one  to  whom  the  amount  of  it  is  to  be  paid) — it  must  be 
presented  the  following  day.  In  case  the  payee  does  not  re- 
side in  the  place  where  is  situated  the  bank  upon  which  the 
check  is  drawn  the  payee  must  transmit  it  for  collection  not 
later  than  the  hour  for  the  closing  of  the  last  mail  on  the  day 
following  the  day  on  which  he  received  it.  A  bank  receiving 
it  for  collection  must  forward  it  on  the  day  of  its  receipt.  To 
send  it  through  various  banks  or  through  parties  in  various 
places  constitutes  negligence  if  the  time  of  presentation  is 
thereby  delayed. 

When  a  maker  of  a  promissory  note  is  in  default  the  in- 
dorser  is  absolved  from  responsibility  for  payment  in  case  he 
wrote  before  his  name  at  the  time  of  the  indorsement  "Without 
recourse  to."  An  indorser  of  a  promissory  note  is  exempt 
from  liability  if  notice  of  its  dishonor  is  not  mailed  to  or 
served  upon  him  within  24  hours  of  its  non-payment. 

When  a  promissory  note  is  discounted  by  a  bank  with 
which  the  maker  has  an  account  the  amount  of  the  note  must 
be  charged  against  the  account,  otherwise  the  indorsers,  if 
there  be  any,  are  released  from  responsibility. 

Indorser.  Properly  and  strictly  an  indorser  is  one  who  has 
put  his  name  on  the  back  of  a  piece  of  negotiable  paper  in 
order  to  transfer  title  from  himself  to  another.  Very  com- 
monly, however,  the  word  is  used  to  include  both  this  class  of 
persons  and  also  those  who  have  put  their  names  upon  the 
paper  as  sureties. 

For  additional  informaton  see  Indorsement. 

Industrial.  Pertaining  to  industry;  processes  or  products 
of  manufacture  ;  or  commercial  production  generally. 

Industrial   stock.  The   stock  of  a  manufacturing  company. 

In  exchange.  When  the  words  "in  exchange"  are  appended 
to  a  draft  the  amount  of  the  draft  is  to  be  paid  in  exchange  on 
the  place  from  which  the  draft  emanates. 

For  example,  if  a  person  in  New  York  draws  on  a  person  in 
Chicago,  the  draft  being  payable  in  exchange  on  New  York, 
the  person  in  Chicago  must  pay  the  draft  in  exchange  on  New 
York;  that  is,  he  delivers  in  payment  of  the  draft  a  bill  of  ex- 
change (which  is  a  draft)  payable  in  currency  (money)  in  New 


SMITH'S  FINANCIAL  DICTIONARY.  265 

York.  Such  a  bill  of  exchange  he  may  purchase  from  a  bank 
in  Chicago  and  it  will  be  paid  by  the  bank  in  New  York  which 
is  a  correspondent  of  the  bank  in  Chicago. 

It  is  the  same  when  a  promissory  note  is  payable  in  ex- 
change. For  example,  a  merchant  in  Chicago  may  purchase 
goods  of  a  merchant  in  New  York  and  give  for  them  a  note 
payable  in  exchange  on  New  York.  When  the  note  matures 
(falls  due)  the  merchant  in  Chicago  pays  it  with  a  bill  of  ex- 
change on  New  York. 

Very  few  drafts  and  notes  are  made  payable  in  exchange 
for  the  reason  that  the  fact  of  making  them  so  payable  renders 
them  non-negotiable  instruments. 

In  exchange  is  dififerent  from  with  exchange ;  see  With  ex- 
change. 

Inflation  bill.  The  name  given  to  a  bill  passed  by  Congress 
in  1874  which  provided  for  an  increase  of  $44,000,000  in  the 
issue  of  legal  tender  notes  (United  States  notes,  commonly 
called  greenbacks).  The  bill  also  provided  for  the  redemption 
of  legal  tender  notes  in  gold  coin  or  in  government  5  per  cent 
bonds  and  further  provided  that  the  notes  when  so  redeemed 
might  be  reissued.  Objection  was  raised  that  the  constant 
reissue  of  legal  tender  notes  and  their  conversion  into  bonds 
would  increase  the  funded  debt  (bond  issue)  without  retiring 
the  notes.    President  Grant  vetoed  the  bill. 

Initialed  check.  When  a  bank  cashier  or  paying  teller  puts 
his  initials  on  a  check  it  signifies  that  the  signature  is  cor- 
rect ;  but  this  initialing  of  a  check  is  not  a  certification  of  it ; 
nor  is  it  in  any  sense  an  indorsement  of  it. 

Inland  exchange.  Same  as  domestic  exchange ;  see  Domes- 
tic exchange. 

In  liquidation.     See  Liquidation. 

In  need.     See  In  case  of  need. 

Inscribed  stock.  English  term ;  stock  (government,  colo- 
nial or  municipal  bonds)  the  name  of  the  owner  of  which  is  in- 
scribed on  the  books  at  the  designated  places  of  registration. 
The  owner  of  inscribed  stock  sold  on  the  London  Stock  Ex- 
change has  to  be  identified  by  a  broker  on  the  exchange  or  the 
broker's  clerk.     See  Identification  of  a  stockholder, 


266  SMITH'S  FINANCIAL  DICTIONARY. 

Insider.  One  who  knows  about  the  inside  affairs  of  a  cor- 
poration or  about  the  secrets  of  a  deal. 

In  sight.  This  term  is  used  to  signify  stocks  (suppHes)  of 
grain,  cotton,  coffee  or  other  commodities  available  for  imme- 
diate use. 

Insolvent.  The  financial  condition  of  one  whose  property 
is  not  sufficient  to  pay  his  debts. 

Inspection.  When  used  as  a  trade  term  it  means  the  inspec- 
tion and  grading  of  grain  or  other  commodities  by  individuals 
authorized  to  do  so  by  law  or  such  inspection  and  grading  by 
exchanges  or  other  commercial  organizations. 

Instalment  notes.  A  series  of  promissory  notes,  issued  in 
discharge  of  a  single  obligation,  which  fall  due  (mature)  at 
intervals.  These  are  separate  notes,  but  they  accomplish  pay- 
ment of  the  obligation  by  instalments. 

Insufficient  funds.  When  a  check  is  received  by  the  bank 
upon  which  it  is  drawn  and  the  dravv'er  (issuer)  has  not  suffi- 
cient funds  to  his  credit  with  which  to  meet  it  the  words  "In- 
sufficient funds"  are  stamped  or  written  on  the  check  and  the 
check  is  rejected. 

Interest.  The  charge  for  the  use  of  money ;  also  the  money 
so  paid  is  designated  as  interest.  The  amount  paid  in  regu- 
lar instalments  to  the  holders  of  bonds  is  designated  as  inter- 
est, while  the  amount  paid  in  regular  instalments  to  the 
holders  of  stock  is  designated  as  dividend. 

On  time  loans  interest  is  generally  calculated  on  the  basis 
of  30  days  in  a  month  and  360  days  in  a  year.  On  call  loans 
and  on  demand  or  sight  paper  interest  is  calculated  on  the 
basis  of  365  days  in  a  year.  (On  notes  interest  in  New  York 
state  is  calculated  at  6  per  cent  in  the  absence  of  a  special 
agreement).  Interest  on  bonds  is  calculated  on  the  basis  of 
30  days  in  a  month  and  360  days  in  a  year. 

In  New  York  state  the  requirement  that  not  more  than  6  per 
cent  interest  shall  be  charged  on  money  loaned  does  not  apply 
to  call  loans.  The  law  says :  "Upon  advances  of  money  re- 
payable on  demand  to  an  amount  not  less  than  five  thousand 
dollars  made  upon  warehouse  receipts,  bills  of  lading,  certifi- 
cates of  stock,  certificates  of  deposit,  bills  of  exchange,  bonds 
or  other  negotiable  instruments,  pledged  as  collateral  security 


SMITH'S  FINANCIAL  DICTIONARY.  267 

for  such  repayment,  any  bank  or  individual  banker  may  receive 
or  contract  to  receive  and  collect  as  compensation  for  mak- 
ing such  advances  any  sum  to  l^e  agreed  upon  in  writing  by  the 
parties  to  such  transaction." 

It  was  formerly  provided  in  New  York  state  that,  "for  the 
purpose  of  calculating  interest  a  month  shall  be  considered 
as  the  twelfth  part  of  a  year  and  as  consisting  of  thirty  days ; 
and  interest  for  any  number  of  days  less  than  a  month  shall 
be  estimated  by  the  proportion  which  such  number  of  days 
shall  bear  to  30."  Now,  however,  there  is  no  definite  provis- 
ion of  law  on  the  subject.  Legally,  a  year  contains  as  many 
days  as  there  are  in  it,  and  legally,  likewise,  a  month  contains 
as  many  days  as  there  are  in  it.  Counting  30  days  as  a 
month  and  12  months  of  30  days  each  as  a  year  is  a  matter  of 
convenience ;  and  while  such  a  basis  of  calculation  might  be 
disputed  it  seldom  is. 

The  date  of  payment  of  interest  is  the  date  on  which  the 
principal  falls  due  unless  a  different  time  is  expressly  stated 
in  the  note  or  other  obligation. 

The  rule  of  the  New  York  Stock  Exchange  is  that  for  the 
time  intervening  between  the  sale  of  securities  and  their  de- 
livery when  transactions  are  regular  way  (delivery  the  day 
after  sale)  or  at  3  (delivery  at  the  end  of  three  days)  no  in- 
terest is  chargeable  by  one  broker  against  the  other ;  nor  does 
either  the  buying  or  selling  broker  make  a  charge  against  his 
customer  for  interest. 

For  longer  contracts,  however,  as  buyer  (or  seller)  4,  10, 
20,  30  or  60,  when  receipt  (or  delivery)  is  not  required  until 
the  end  of  the  time  specified  (whatever  it  may  be),  interest 
is  charged  and  is  paid  by  the  buyer  if  the  purchase  is  made 
with  the  privilege  accorded  to  him  of  not  receiving  and  pay- 
ing for  the  securities  for  a  period  named  ;  or  it  is  charged  to 
and  paid  by  the  seller  if  the  sale  is  made  with  the  privilege 
accorded  to  him  of  not  delivering  the  securities  for  a  period 
named.  Exceptions  to  the  rule  are  contracts  flat  (without 
interest). 

On  time  contracts  (contracts  of  longer  duration  than  three 
days)    the   rate   of  interest  charged,   unless   otherwise  stipu- 


26S  SMITH'S  FINANCIAL  DICTIONARY. 


lated,  is  6  per  cent,  to  be  calculated  by  days.  Accrued  divi- 
dends on  stocks  and  interest  on  bonds  go  to  the  buyer. 

In  marginal  transactions  in  stocks  the  practise  as  regards 
interest  is  illustrated  by  the  following  example : 

If  a  speculator  buys  lOO  shares  of  stock  at  lOO  on  lo  per 
cent  margin  his  broker  receives  the  stock  and  pays  $io,00O 
for  it  to  the  broker  from  whom  it  was  purchased.  The  buy- 
ing broker  has  received  $i,ooo  from  his  customer  and  he  ad- 
vances to  the  customer  $9,000,  holding  the  stock  as  security 
for  the  money  so  advanced.  On  the  $9,000  he  charges  inter- 
est (usually  6  per  cent).  If  the  stock  is  sold  later  at  no 
$11,000  is  received  for  it.  The  gross  profit  is  $1,000,  but  from 
this  amount  are  deducted  the  broker's  commission  and  the 
interest  on  the  money  advanced  by  the  broker. 

Usually  when  a  stock  is  sold  short  no  interest  has  to  be 
paid  by  the  seller  (the  broker's  customer).  The  broker  who 
lends  the  stock  pays  interest  on  the  money  which  is  received 
for  the  stock  from  the  borrowing  broker  and  which  is  held 
■  pending  the  return  of  the  stock.  Even  when  the  stock  is 
lending  flat  no  interest  has  to  be  paid  by  the  seller  for  the  rea- 
son that  while  no  interest  is  collected  from  the  lender  of  the 
stock  on  the  money  advanced  on  it  to  him  the  value  of  it  is  col- 
lected from  the  one  to  whom  the  stock  was  sold  and  to  whom 
the  borrowed  stock  was  delivered  in  fulfilment  of  the  sale. 
One  amount,  accordingly,  balances  the  other.  When,  however, 
the  stock  is  lending  at  a  premium  (when  not  only  no  interest 
is  paid  by  the  lender  of  the  stock,  but  a  premium  for  its  use 
is  exacted  by  him  from  the  borrowing  broker)  the  speculator 
for  whom  it  is  borrowed  to  make  delivery  is  charged  with  the 
amount  of  the  premium.  The  actual  owner  of  the  stock  is 
credited  with  the  amount  of  the  premium  by  his  broker,  who 
loaned  the  stock. 

See  And  interest;  also  see  Compound  interest;  also  see 
Iricome  table. 

The  term  interest  is  frequently  used  in  the  sense  of  owner- 
ship, as,  for  instance,  "the  Jones  interest  in  the  Overland 
Railroad  is  large,"  meaning  that  Jones's  ownership  in  the 
stock  (or  other  securities  of  the  road)   is  large;  or  the  Jones 


SMITH'S  FINANCIAL  DICTIONARY.  269 

interest  may  refer  to  the  ownership,  not  by  Jones  alone,  but 
by  Jones  and  associates. 

The  term  interest  is  commonly  used  in  referring  to  specu- 
lative operations.  For  instance,  the  long  interest  in  the  stock 
market  means  the  amount  of  stocks  that  has  been  bought 
and  is  held  in  expectation  of  an  advance.  The  term  ap- 
plies in  the  same  way  to  an  individual  stock ;  it  means  the  total 
amount  of  the  stock  that  has  been  bought  and  is  held  in  expec- 
tation of  an  advance.  On  the  other  hand,  the  short  interest 
means  the  amount  of  the  stocks  (or  the  stock)  that  has  been 
sold  short  in  expectation  of  a  decline. 

Interest  account.  The  interest  account  is  the  account  in 
which  are  entered  what  is  paid  out  as  interest  and  what  is  re- 
ceived as  interest. 

The  interest  account  of  an  individual  speculator  is  the 
charge  against  him  made  by  the  broker  for  interest  on  the 
difference  between  the  margin  furnished  by  him  and  the  cost 
of  the  stocks  or  commodities  (grain,  cotton  or  coffee,  etc.) 
bought  for  him  while  they  are  carried  (held)  for  him.  The  in- 
terest account  is  an  important  consideration  in  the  operations 
of  a  speculator. 

A  broker  usually  charges  his  customers  interest  at  the  full 
legal  rate  (in  New  York  state,  6  per  cent),  whereas,  he  is  usu- 
ally able  to  borrow  money  at  a  materially  lower  rate  for  use 
in  carrying  his  customers'  stocks  or  commodities.  The 
broker's  interest  account  (as  distinguished  from  the  specula- 
tor's interest  account)  is,  therefore,  profitable  to  him.  It  is 
often  the  case  that  the  profit  in  a  broker's  interest  account 
defrays  his  ofifice  expenses. 

Interest-bearing.  Bearing  or  paying  interest.  The  bonds 
issued  by  the  United  States  government,  since  the  government 
pays  interest  on  them,  are  interest-bearing  obligations ;  the 
money  issued  by  the  United  States  government,  since  the  gov- 
ernment pays  no  interest  on  it,  is  a  non-interest-bearing  obli- 
gation. 

Interest-bearing  debt.     A  debt  upon  which  interest  is  paid. 

Interest  on  balance.  The  interest  paid  on  the  amount 
standing  to  the  credit  of  a  bank  depositor  at  the  end  of  each 
day   (the  interest  generally  being  computed  monthly). 


270  SMITH'S  FINANCIAL  DICTIONARY. 

Interest  warrant.  A  warrant  (or  check)  given  in  payment 
of  interest,  as,  for  instance,  interest  on  a  bond. 

Interim  certificate.  A  temporary  certificate,  as,  for  in- 
stance, a  certificate  calling  for  and  exchangeable  for  a  speci- 
fie'd  number  of  shares  of  stock  not  yet  issued  but  to  be  issued. 

Interim  dividend.  Distribution  of  profit  in  advance — that 
is,  before  the  books  are  made  up  and  the  final  and  full  divi- 
dend for  the  year  is  declared. 

Interior  movement  of  money.  This  term  as  used  in  New 
York  means  the  movement  or  flow  of  money  from  New  York 
to  other  domestic  points  (but  not  wholly  interior  points ;  sea- 
board points  are  included)  and  the  flow  from  other  domestic 
points  to  New  York.  When  it  is  said  that  the  interior  move- 
ment of  money  is  in  favor  of  New  York  it  is  meant  that  more 
money  is  coming  to  New  York  than  is  going  from  New  York. 
Likewise,  when  it  is  said  that  the  interior  movement  of  money 
is  against  New  York  it  is  meant  that  more  money  is  going 
from  New  York  than  is  coming  to  New  York. 

Internal  commerce  or  trade.  Home  commerce  or  trade ; 
commerce  within  the  boundaries  of  a  country. 

Internal  revenue.  Revenue  derived  from  excise  and  license 
duties  or  taxes  and  special  taxes  on  personal  property. 

International  check.  A  check  drawn  in  one  country  and 
payable  in  any  other  country  where  the  drawer  has  a  corres- 
pondent.    Such  checks  are  sold  by  foreign  exchange  houses. 

International  cheque.  Same  as  international  check ;  see 
International  check. 

International  money.  Gold,  the  purchasing  power  of  which 
is  the  same  throughout  the  civilized  world. 

International  stock.  Means  in  Wall  Street  an  American 
stock  which  is  dealt  in  on  the  London  Stock  Exchange  as  well 
as  on  the  New  York  Stock  Exchange. 

International  trade.     The  exports  and  imports  of  a  country. 

Interstate  commerce  law.  An  act  of  Congress  (February  4, 
1887)  for  the  regulation  of  commerce  between  the  several 
states  and  establishing  a  special  commission  for  the  adminis- 
tration of  the  law.  The  law  prohibits  unjust  discrimination  in 
freight  charges  by   means  of  special  rates  and  prohibits  the 


SMITH'S  FINANCIAL  DICTIONARY.  271 

pooling  of  freight  (see  Pool)  by  competing  lines  of  transporta- 
tion. 

Into  the  bargain.  In  addition  to  what  was  agreed  :  thrown 
in  for  good  measure ;  besides. 

Inventory.  A  detailed  schedule  of  merchandise  or  other 
property. 

Investment  bill.  A  bill  of  exchange  bought  at  a  discount 
and  held  for  the  profit  that  will  be  realized  when  paid  at  its 
face  (full  amount)  at  maturity. 

Investment  broker.  One  who  buys  or  sells  stocks  and  bonds 
outright   and  not  on  margin   for  others. 

Investment  buying.  Means  in  Wall  Street  buying  of  secu- 
rities by  persons  who  intend  to  hold  their  purchases  for  divi- 
dends or  interest  or  for  appreciation  in  value. 

Investment  securities.  Securities  purchased  to  be  held  per- 
manently, more  especially  to  secure  the  interest  and  dividends 
which  they  pay. 

In  ordering  the  purchase  of  securities  on  the  New  York 
Stock  Exchange  the  practise  is  to  deposit  margin  with  the 
broker  the  same  as  in  a  speculative  transaction.  Then,  the 
balance  is  paid  to  the  broker  when  the  securities  are  ready  for 
delivery.  In  ordering  by  mail  margin  is  sent.  A  demand 
draft  is  drawn  by  the  broker  on  the  purchaser  for  the  balance 
and  the  securities  are  attached  to  the  draft  to  be  surrendered 
to  the  purchaser  on  the  payment  of  the  draft.  The  draft  and 
securities  may  be  sent  through  a  bank,  which  will  undertake 
the  transmission  of  the  securities  and  the  collection  of  the 
draft,  or  it  may  be  sent  by  an  express  company,  which  will  do 
the  work. 

In  buying  direct  from  a  dealer,  if  the  transaction  is  con- 
ducted in  his  office,  it  is  a  simple  matter  of  purchase  and  pay- 
ment, although  the  payment  must  be  in  a  manner  satisfactory 
to  the  dealer — by  certified  check  or  cash. 

In  selling  through  a  broker  securities  that  have  been  held 
for  investment  the  practise  is  for  the  seller  to  deliver  the  secu- 
rities to  the  broker  and  take  his  receipt  for  them.  Then,  on  the 
sale  of  the  securities  the  broker  will  deliver  his  check  for  the 
amount  realized  from  the  securities.     The  receipt  may  be  re- 


272  SMITH'S  FINANCIAL  DICTIONARY. 


turned,  although  this  is  not  necessary.     In  selling  to  a  dealer 
it  is  a  simple  matter  of  making  a  bargain  with  him. 

The  best  way  of  transmitting  stocks  or  bonds  to  and  from 
out-of-town  points  is  by  express.  It  is  the  rule  for  the  out-of- 
town  party  to  the  transaction,  whether  he  is  buyer  or  seller, 
to  pay  the  express  charges  as  the  expense  would  be  avoided 
by  his  receipt  or  delivery  of  the  securities  in  person  or  by  rep- 
resentative. The  express  charges  are  based  on  the  value  of  the 
securities  as  marked  on  the  outside  of  the  package  and  the  exr 
press  company  is  liable  only  to  the  extent  of  the  marked  value 
upon  which  charges  are  paid.  A  package  of  securities,  there- 
fore, should  be  marked  with  the  real  value  if  it  is  desired  to 
hold  the  express  company  responsible  for  the  full  value  in  case 
of  the  loss  of  the  package. 

Unassigned  registered  bonds  and  unassigned  stock  may  be 
sent  by  registered  letter,  but  coupon  bonds  and  stocks  as- 
signed in  blank,  being  liable  to  total  loss,  should  be  sent  by 
express. 

Points  to  be  considered  in  purchasing  securities  for  invest- 
ment are  that  the  principal  and  interest  (or  dividend)  shall  be 
assured ;  that  the  income  from  the  securities  shall  be  satisfac - 
tor}^ ;  that  the  securities  shall  be  readily  salable ;  and  that  the 
securities  shall  be  available  to  pledge  as  collateral  for  loans 
in  case  it  is  desired  to  use  them  in  that  way. 

Also  see  Income  basis. 

Investment  speculation  or  speculative  investment.  Is  when 
a  person  buys  outright  a  stock  or  a  bond,  primarily  to  obtain 
the  dividend  or  interest  paid  on  it,  but  also  with  the  intention 
of  selling  should  there  be  a  material  advance  in  the  price  of 
the  security. 

Likewise,  the  term  applies  when  a  person  buys  outright  a 
stock  that  is  not  paying  dividends,  but  which  the  buyer  expects 
will  in  time  pay  dividends,  with  a  resultant  improvement  in 
the  price  of  the  stock ;  or  the  term  applies  when  a  person  buys 
outright  a  bond  that  is  not  paying  interest  (as  an  income 
bond),  but  which  the  buyer  expects  will  in  time  pay  interest, 
with  a  resultant  improvement  in  the  price  of  the  bond. 

Investor.  One  who  buys  stocks  and  bonds  to  hold  for  divi- 
dends or  interest  or  for  appreciation  in  value ;  or  one  who  buys 


SMITH'S  FINANCIAL  DICTIONARY.  273 

any  property  for  the  income  it  will  bring   or  for  an  apprecia- 
tion in  its  value. 

Also  see  Investment  securities. 

Invisible  supply.  A  trade  term  for  grain  in  the  hands  of 
farmers  or  others  and  not  included  in  the  statement  of  visible 
supply ;  see  Visible  supply. 

Invoice.  A  list  of  goods  or  materials  sent  to  a  purchaser, 
consignee   or  factor,  together  with  prices  and  charges. 

Inward  trade.  Another  name  for  import  trade ;  goods  and 
other  articles  of  trade  bought  and  brought  from  other  coun- 
tries. 

I  O  U.  I  owe  you ;  a  written  acknowledgment  of  debt ;  a 
memorandum  of  an  obligation.  The  letters  I  O  U  are  followed 
by  the  amount  of  the  indebtedness  and  then  by  the  signature. 

When  the  I  O  U  simply  specifies  the  amount  of  the  debt  it 
is  a  mere  acknowledgment  of  the  obligation,  but  when  to  it  is 
added  a  promise  to  pay  at  a  certain  future  time  it  is  a  promis- 
sory note  and  is  enforceable  as  such. 

I.  p.     These  letters  are  sometimes  used  in  stock  market  re- 
ports for  instalment  paid,  as  instalment  on  the  purchase  price 
or  instalment  of  an  assessment. 

Irish  dividend.  A  facetious  term  used  when  an  assessment 
is  levied  on  a  stock. 

Ironclad  note.  A  name  given  to  the  form  of  note  required 
by  banks  and  other  lenders  of  money  from  borrowers  who 
furnish  collateral  security ;  the  correct  name  is  collateral  note ; 
see  Collateral  note. 

Irredeemable  bond.  A  bond  which  cannot  be  redeemed  or 
paid  off,  but  the  interest  on  which  goes  on  forever.  There 
have  been  such  stock  (equivalent  to  bond)  issues  in  Europe 
by  municipalities,  but  they  have  now  for  the  most  part  been 
bought  up  and  canceled. 

Irredeemable  currency.  Paper  money  redeemable  neither 
in  gold  nor  silver;  fiat  money.  United  States  notes  (green- 
backs) are  irredeemable  currency  for  the  reason  that  while 
they  are  received  and  paid  for  in  gold  by  the  United  States 
Treasury  they  are  not  retired    but  are  reissued. 

Irregular.     Not  according  to  requirements. 


274  SMITH'S  FINANCIAL  DICTIONARY. 


Also,  the  stock  market  is  irregular  when  some  stocks  ad- 
vance and  others  decline  in  price. 

Irregular  indorsement.  Not  in  the  usual  manner.  An  irreg- 
ular indorsement  may  originate  in  any  of  several  ways ;  but 
in  any  case  an  indorser  guarantees  the  genuineness  of  all  pre- 
ceding signatures. 

Irrevocable  assignment.  An  assignment  that  cannot  be  re- 
voked. Such  an  assignment  is  made  in  transferring  title  to 
stocks  and  bonds. 

Irrevocable  power  of  attorney.  A  power  of  attorney  that 
cannot  be  revoked;  such  a  power  is  given  in  assigning  or 
transferring  title  to  stocks  and  bonds.  The  blank  or  form 
used  for  a  stock  is  commonly  spoken  of  as  a  stock  power  and 
that  for  a  bond  as  a  bond  power. 

On  the  London  Stock  Exchange  the  equivalent  of  an  irrev- 
ocable power  of  attorney  for  stocks  or  bonds  is  a  transfer 
deed. 

I.  S.  C.  Abbreviation  in  railroad  accounts  for  interstate 
commerce. 

Issue.  When  applied  to  negotiable  instruments  the  term 
issue  means  the  first  delivery  of  the  instrument  complete  in 
form  to  a  person  who  takes  it  as  a  holder;  when  applied  to 
securities  the  term  means  the  outstanding  stock  or  bonds  of 
a  company. 


SMITH'S  FINANCIAL  DICTIONARY.  275 


J 


Jay  Cooke  panic.  So-called ;  Jay  Cooke  &  Co.,  a  large  bank- 
ing- house  in  New  York,  failed  September  18,  1873.  ^  panic 
followed.  The  Union  Trust  Company  stopped  business  tem- 
porarily (partly  as  a  result  of  a  defalcation  of  $500,000  by  its 
secretary)  ;  the  Bank  of  the  Commonwealth  closed  its  doors 
and  never  reopened  them  and  numerous  other  financial  con- 
cerns and  stock  brokers  went  down  in  the  crash. 

At  II  o'clock  on  Saturday,  September  20,  the  governing 
committee  of  the  New  York  Stock  Exchange  ordered  the 
exchange  to  be  closed  and  it  was  not  reopened  until  Septem- 
ber 30. 

The  failure  of  Jay  Cooke  &  Co.  was  brought  about  by  the 
collapse  of  their  effort  to  finance  the  Northern  Pacific  Rail- 
road, which  was  then  in  course  of  construction. 

The  so-called  Jay  Cooke  panic  is  also  generally  known  as 
the  panic  of  1873. 

Jeweler's  bar.  A  name  given  to  a  bar  or  ingot  of  fine  (pure) 
gold  of  a  size  convenient  for  use  in  the  fine  arts.  Jeweler's 
bars  are  of  different  sizes,  containing  from  $100  to  $600  worth 
of  gold.     A  large  size    containing  $5,000  worth    is  also  made. 

Also  see  Export  bar. 

Job.  To  buy  in  bulk  from  manufacturer  or  importer  and 
sell  in  lots  to  dealers. 

Jobber.  A  member  of  the  London  Stock  Exchange  who 
deals  between  members  of  the  exchange  and  not  for  outside 
principals  or  clients.  He  is  practically  a  wholesale  dealer  in 
securities,  buying  as  well  as  selling.  He  will  either  buy  or 
sell  at  prices  named  by  him. 

The  jobbers  make  the  market  (establish  the  prices)  in  Lon- 
don, whereas  in  New  York  prices  are  established  by  the  bids 
and  offers  of  brokers. 

On  the  London  Stock  Exchange  a  broker  is  not  a  jobber ; 
he  is  merely  an  agent  who  acts  for  another  in  buying  from    or 


276  SMITH'S  FINANCIAL  DICTIONARY. 

selling  to  a  jobber.  A  broker  in  executing  an  order  asks  a 
jobber  to  "make  a  price"  on  the  security  in  which  he  wishes 
to  deal  and  the  jobber,  who  does  not  know  whether  the  broker 
is  buyer  or  seller,  names  two  prices,  for  instance,  99  3-8  and 
99  5-8,  meaning  that  he  will  sell  at  the  higher  or  buy  at  the 
lower  price.  If  the  broker  has  an  order  to  buy  he  buys  of  the 
jobber  at  his  (the  jobber's)  selling  price  or  if  he  has  an  order 
to  sell  he  sells  to  the  jobber  at  his  (the  jobber's)  buying  price. 
The  jobber  expects  to  undo  or  cover  the  bargain  at  a  profit  by 
a  fresh  transaction  with  another  jobber  or  broker.  The  jobber 
has  prices  for  the  account  and  other  prices  for  money.  See 
For  the  account ;  also  see  For  cash,  under  which  title  will  be 
found  the  definition  of  for  money. 

Another  name  for  jobber  is  dealer,  but  its  use  is  less  frequent 
than  jobber. 

The  member  of  the  New  York  Stock  Exchange  who  corre- 
sponds in  a  measure  to  the  jobber  on  the  London  Stock  Ex- 
change is  the  room  trader  (sometimes  called  floor  trader). 
He  speculates  on  his  own  account  and  when  he  purchases  a 
stock  he  tries  at  once  or  as  soon  as  possible  to  sell  it  at  a  profit. 
Likewise,  when  he  sells  a  stock  short  (sells  stock  which  he 
does  not  own)  he  tries  at  once  or  as  soon  as  possible  to  buy  it 
back  at  a  profit.  He  is  not  ready,  as  is  the  London  jobber,  to 
either  buy  or  sell  at  prices  named  by  himself,  but  he  bids  for 
(offers  to  buy)  or  offers  (offers  to  sell)  stock  accordingly  as 
he  thinks  he  may  be  able  to  make  a  profit  by  probable  subse- 
quent changes  in  the  price.  It  is  his  purpose  each  day,  if  prac- 
ticable, to  even  up — to  sell  as  many  stocks  as  he  has  bought 
or  to"  buy  as  many  stocks  as  he  has  sold. 

In  trade  a  jobber  is  one  who  buys  goods  in  bulk  from  the 
importer  and  manufacturer  and  sells  to  the  retailer. 

Jobber's  turn.  London  Stock  Exchange  term ;  the  jobber's 
profit  as  represented  by  the  difference  between  the  price  at 
vvhich  a  jobber  buys  from  or  sells  to  a  broker  and  the  middle 
price  at  which  he  covers  his  bargain  (that  is,  when  he 
covers  at  the  middle  price,  as  he  often  does).  Thus,  if  his 
prices  are  99  7-8 — 100  1-8  and  he  sells  to  a  broker  at  100  1-8 
and  undoes  or  covers  the  bargain  by  buying  from  another  job- 
ber at  100  his  turn  is  1-8.     But  if  he  buys  from  another  broker 


SMITH'S  FINANCIAL  DICTIONARY.  277 

at  99  7-8  he  makes  two  turns.  It  is  not  often,  however,  that 
he  is  fortunate  enough  to  deal  between  two  brokers;  more  fre- 
quently he  "takes  his  turn"  by  covering  his  bargain  with 
another  jobber  at  the  middle  price. 

Job  lot.  vV  lot  of  goods,  miscellaneous  in  kind  and  quality, 
sold  cheap. 

Joint  account.  When  two  or  more  speculators  join  in  a 
transaction  for  their  mutual  benefit  or  risk  they  are  in  joint 
account. 

Joint  adventure.  Same  as  joint  account,  but  a  term  that  is 
little  used. 

Joint  and  several  note.  A  note  signed  by  two  or  more  par- 
ties in  which  it  is  specified  that  they  are  jointly  and  severally 
responsible  for  the  payment  of  it. 

Joint  bond.  A  bond  for  the  payment  of  the  principal  and 
interest  on  which  two  (or  more)  parties  are  jointly  bound. 
Such  a  bond  is  not  uncommon  in  railroad  issues.  Two  rail- 
roads may  jointly  guarantee  both  principal  and  interest  on 
bonds  issued  to  acquire  a  third  railroad  which  is  to  be  owned 
by  the  first  two  in  common. 

Joint  indorsement.  An  indorsement  on  a  promissory  note 
that  is  payable  to  two  or  more  persons  who  are  not  partners. 

Joint  mortgage.  A  mortgage  executed  jointly  by  two  or 
more  parties.     For  additional  information  see  Joint  bond. 

Joint  note.     A  note  signed  by  two  or  more  parties. 

Joint-stock  company.  A  company  whose  capital  stock  is 
divided  into  shares  of  equal  amount  is  a  joint-stock  company. 
For  additional  information  see  Company. 

Judgment  creditor.  A  creditor  whose  claim  has  been  re- 
duced to  a  judgment  against  his  debtor. 

Judgment  debt.  A  debt  found  due  and  awarded  by  decision 
of  a  court. 

Judgment  debtor.  A  debtor  against  whom  his  creditor  has 
recovered  (obtained)  a  judgment  of  record — that  is,  a  judg- 
ment which  has  been  placed  on  record. 

Judgment  note.  A  promissory  note  coupled  with  a  warrant 
of  attorney  authorizing  the  entry  of  a  judgment  without  pro- 
cess  against  the  maker  in  case  of  non-payment. 

Jungle  or  jungle  market.     A  colloquial  name  for  the  depart- 


278  SMITH'S  FINANCIAL  DICTIONARY. 


ment  of  the  London  Stock  Exchange  in  which  West  African 
shares  (stocks)  are  dealt  in. 

Junk.     A  colloquialism   for  worthless   securities ;   same   as 
cats  and  dogs. 


K 


Kaffir  circus.  A  colloquial  name  for  the  group  of  jobbers 
on  the  London  Stock  Exchange  who  operate  in  South  African 
stocks;  the  term  also  applies  to  the  place  where  they  congre- 
gate. 

Kaffirs.  London  Stock  Exchange  name  for  the  shares 
(stocks)  of  the  South  African  mining,  land  and  other  com- 
panies. 

Kangaroos.  London  Stock  Exchange  name  for  the  shares 
(stocks)  of  West  Australian  mining,  land  and  other  compa- 
nies ;  another  name  is  Westralians. 

Killing.  A  colloquialism ;  when  a  speculator  has  made  an 
unusually  large  profit  he  is  said  to  have  made  a  killing.  A 
killing  may  be  made  in  a  single  stock  or  in  the  general  market, 
that  is,  in  several  stocks.  Likewise,  a  killing  may  be  made  in 
grain,  cotton,  coffee   or  any  other  speculative  commodity. 

Kilo.  A  term  used  in  the  grain  trade  as  an  abbreviation  for 
kilogram.  Quotations  from  Antwerp  are  per  lOO  kilos,  equal 
to  3.67  bushels;  quotations  from  Berlin  are  per  1,000  kilos, 
equal  to  36.74  bushels. 

Kite.  A  name  sometimes  applied  to  an  accommodation  bill 
(draft  or  acceptance).  For  additional  information  see  Accom- 
modation paper. 

Kiting.  Consists  of  incurring  a  fresh  obligation  to  dis- 
charge an  old  one. 

The  commonest  form  of  kiting  is  by  means  of  checks.  Ex- 
ample :  A  depositor  in  a  bank  has  issued  a  check  which  over- 
draws his  account.  He  makes  out  another  check,  obtains 
cash  for  it  elsewhere  than  at  the  bank,  and  deposits  the  cash 


SMITH'S  FINANCIAL  DICTIONARY.  279 

in  the  bank  in  time  to  meet  the  first  check.  Two  or  three  days 
elapse  before  the  second  check  reaches  the  bank  and  before 
its  arrival  another  check  has  been  made  out  and  the  cash 
obtained  for  it  and  deposited.     So  the  process  continues. 

A  person  engaged  in  kiting  may  arrange  to  exchange  checks 
with  another  person.  Thus,  if  he  has  issued  a  check  which 
overdraws  his  account  he  makes  out  a  new  check  and  ex- 
changes it  for  a  check  drawn  by  the  other  person  on  another 
bank,  which  latter  check  he  (the  first  person)  deposits  in  his 
own  bank  to  meet  his  own  first  check.  He  may  draw  and  ex- 
change a  third  check  to  meet  his  second  check;  and  so  on. 

The  person  engaged  in  kiting  may  gain  time  by  sending 
his  checks  to  other  places — places  as  remote  from  the  one  in 
which  is  situated  his  bank  as  possible.  The  more  remote  the 
places  the  longer  the  checks  are  in  reaching  the  bank  upon 
which  they  are  drawn  for  payment. 

Another  example  of  kiting :  A  person  in  New  York  has 
issued  a  check  which  overdraws  his  account.  He  draws 
(draws  a  draft)  on  another  person  in  Chicago  (in  accordance 
with  a  previous  arrangement  made  with  this  second  person) 
and  deposits  the  draft  in  his  own  bank  to  meet  the  check 
which  overdraws  his  account.  Then,  he  sends  another  check 
of  his  own  to  the  person  in  Chicago  upon  whom  he  has  drawn. 
This  check  is  used  in  Chicago  in  meeting  (paying)  the  draft 
on  its  arrival  there.  This  check  on  arrival  in  New  York  is 
met  with  another  draft;  and  so  on. 

Again,  three  or  more  persons  and  three  or  more  places 
may  be  involved  in  a  kiting  operation.  A  in  New  York  may 
draw  on  B  in  San  Francisco,  B  in  San  Francisco  may  draw  on 
C  in  St.  Louis  and  finally  C  in  St.  Louis  may  draw  on  A  in 
New  York.  Ten  days  or  more  will  elapse  between  the  time 
when  A  draws  on  B  and  the  time  when  C's  draft  on  A  reaches 
New  York.  In  the  meantime  A  will  have  the  use  of  the  money 
obtained  on  his  draft  on  B  and  just  before  the  arrival  in  New 
York  of  C's  draft  on  A  A  will  have  drawn  a  new  draft ;  and  so 
the  process  may  continue. 

Another  form  of  kiting  is  for  a  person  to  obtain  an  accom- 
modation note  from  another  person  for,  say,  60  days  and 
have  it  discounted  at  his  bank.     The  amount  is  credited  to  the 


28o  SMITH'S  FINANCIAL  DICTIONARY. 

account  of  the  person  who  procures  the  discounting  of  the 
note  and  he  may  draw  checks  against  it.  When  the  note 
reaches  maturity  (becomes  due)  a  second  note  may  be  used  to 
take  up  the  first. 

Knocked  down.  A  colloquialism  employed  at  an  auction 
sale.  When  the  highest  price  obtainable  for  the  property  has 
been  reached  the  auctioneer  brings  down  his  hammer  or  gavel 
and  the  property  is  said  to  have  been  knocked  down,  or  in 
other  words,  sold  at  that  price. 


L 


Lake-and-rail.  Said  of  freight  transportation  partly  by  lake 
and  partly  by  rail. 

Lakh.  One  hundred  thousand;  a  lakh  of  rupees  is  100,000 
rupees. 

Lamb.  A  Wall  Street  name  applied  to  one  inexperienced  in 
operations  in  stocks ;  a  beginner  in  speculation  (in  other 
words,  an  outsider  or  countryman). 

Lame  duck.  Wall  Street  term  for  a  speculator  who  is  tem- 
porarily unable  to  meet  his  engagements. 

Land  grant.  A  grant  of  land  by  the  government.  The  rail- 
roads crossing  the  Western  plains  received  large  grants  of 
lands  from  the  government  to  aid  in  their  construction. 

Land  grant  bond.  A  bond  issued  under  a  land  grant  mort- 
gage. 

Land  grant  mortgage.  A  mortgage  on  a  grant  of  land  by 
the  Federal  or  a  state  government  under  which  bonds  are  is- 
sued. 

Large  bond.  The  name  applied  to  a  bond  for  a  larger 
amount  than  $1,000.  Small  bond  is  the  name  applied  to  a 
bond  for  a  smaller  amount  than  $500.  The  usual  amount  of  a 
bond  is  $1,000. 

Last  board.  On  exchanges  where  there  are  calls  of  stocks 
and  bonds    or  calls  of  grain,  cotton,  etc.,  the  last  call  is  often 


SMITH'S  FINANCIAL  DICTIONARY.  281 

designated  as  the  last  board.  Also,  the  last  printed  list  of 
sales  on  the  New  York  Stock  Exchange,  covering  the  period 
from  2  to  3  p.  m.,  is  called  the  last  board, 

Latin  Union,  The.  A  monetary  union  formed  by  the  adop- 
tion of  the  same  currency  system  by  Belgium,  France,  Greece, 
Italy  and  Switzerland.     See  Moneys  of  the  world. 

Lawful  money.  The  term  lawful  money  is  understood  to 
apply  to  every  form  of  money  endowed  by  law  with  legal  ten- 
der quality ;  see  Legal  tender. 

Law  merchant.  The  body  of  commercial  usages  or  rules 
recognized  by  civilized  nations  as  regulating  the  rights  of 
persons  engaged  in  trade. 

Laying  in  balance.     Depositing  as  a  security  or  pledge. 

Lazy  weight.     Scant  weight. 

Leased  line.  A  railroad  leased  to  another  railroad ;  the  in- 
terest and  dividends  on  its  securities  are  (usually)  paid  by 
the  railroad  to  which  it  is  leased. 

Ledger.  The  principal  book  of  accounts  in  which  all  trans- 
actions of  each  day  are  entered  under  appropriate  heads  so  as 
to  show  the  debits  and  credits  of  each  account. 

Leeman's  act.  English  term ;  an  act  of  Parliament  by  which 
a  seller  of  bank  shares  must  at  the  time  of  sale  state  the  num- 
bers of  the  shares  that  he  is  selling.  The  act  was  passed  to 
prevent  bear  sales  of  bank  shares. 

Legal  debt.     One  that  is  enforceable  in  a  court  of  law. 

Legal  holiday.  A  day  appointed  by  law  to  be  kept  as  a  holi- 
day. 

Contracts  falling  due  on  a  legal  holiday  are  settled  on  the 
preceding  day.  Where  two  holidays  occur  on  consecutive 
days  contracts  falling  due  on  the  second  of  the  holidays  are 
settled  on  the  succeeding  day. 

Stocks  sold  on  Friday  on  the  New  York  Stock  Exchange  in 
the  regular  way  (deliverable  the  next  day)  are  not  required  to 
be  delivered  until  Monday,  Saturday  being  a  half-holiday. 
The  return  of  money  loaned  on  call  on  Friday  cannot  be  de- 
manded until  Monday.  Time  contracts  falling  due  on  Satur- 
day are  settled  on  Friday  and  those  falling  due  on  Sunday 
are  settled  on  Monday  (or  the  next  business  day  if  Monday 
is  a  holiday). 


282  SMITH'S  FINANCIAL  DICTIONARY. 

Legal  minimum  reserve.  The  minimum  reserve  required 
by  law  to  be  held  by  a  bank  against  deposits.  See  Bank  re- 
serve. 

Legal  requirement.  As  applied  to  the  reserve  of  a  bank 
legal  requirement  means  the  amount  in  lawful  money  required 
by  law  to  be  held  against  deposits. 

Legal  reserve.  The  amount  in  lawful  money  required  by 
law  to  be  held  against  deposits. 

Legal  tender.  The  following  statement  concerning  the  legal 
tender  properties  of  money  of  the  United  States  is  based  upon 
United  States  Revised  Statutes,  sections  3585,  3586,  3587,  3588, 
3589,  3590  and  the  acts  amendatory  thereof  and  additional 
thereto : 

Gold  coin,  standard  silver  dollars,  subsidiary  silver,  minor 
coins,  United  States  notes  (greenbacks)  and  Treasury  notes 
of  1890  have  the  legal  tender  quality  as  follows :  Gold  coin  is 
legal  tender  for  its  nominal  value  when  not  below  the  limit  of 
tolerance  in  weight ;  when  below  that  limit  it  is  legal  tender  in 
proportion  to  its  weight ;  standard  silver  dollars  and  Treasury 
notes  of  1890  are  legal  tender  for  all  debts,  public  and  private, 
except  where  otherwise  expressly  stipulated  in  the  contract; 
subsidiary  silver  is  legal  tender  to  the  extent  of  $10,  minor 
coins  to  the  extent  of  25  cents  and  United  States  notes  for  all 
debts,  public  and  private,  except  duties  on  imports  and  inter- 
est on  the  public  debt.  Gold  certificates,  silver  certificates  and 
national  bank  notes  are  non-legal  tender  money.  Both  kinds 
of  certificates,  however,  are  receivable  for  all  public  dues  and 
national  bank  notes  are  receivable  for  all  public  dues  except 
duties  on  imports  and  may  be  paid  out  for  all  public  dues  ex- 
cept interest  on  the  public  debt. 

The  term  lawful  money  is  understood  to  apply  to  every  form 
of  money  which  is  endowed  by  law  with  the  legal  tender  qual- 
ity. 

Following  is  a  compilation  by  the  Treasury  Department 
showing  what  forms  of  money  are  legal  tender  and  what  forms 
are  not  legal  tender: 

LEGAL  TENDER. 

Gold  coins. — The  gold  coins  of  the  United  States  are  a  legal  tender  in 
all  payments  at  their  nominal  value  when  not  below  the  standard  weight 
and  limit  of  tolerance  provided  by  law  for  the  single  piece,  and,  when  re- 


SMITH'S  FINANCIAL  DICTIONARY.  2S3 

-    -  ■  —  ■  .      ■    ■ ^ 

duced  in  weight  below  such  standard  and  tolerance,  are  a  legal  tender  at 
valuation  in  proportion  to  their  actual  weight. 

Standard  silver  dollars  arc  a  legal  tender  at  their  nominal  value  for  all 
debts  and  dues,  public  and  private,  except  where  otherwise  expressly 
stipulated  in  the  contract. 

Subsidiary  silver  coin. — The  silver  coins  of  the  United  States  of 
smaller  denominations  than  one  dollar  are  a  legal  tender  in  all  sums  not 
exceeding  ten  dollars,  in  full  payment  of  all  dues,  public  and  private. 

Minor  coin  (coins  of  copper,  bronze,  or  copper-nickel). — Minor  coins 
are  a  legal  tender  at  their  nominal  value  for  any  amount  not  exceeding 
twenty-five  cents  in  any  one  payment. 

United  States  notes  (known  as  legal  tender  notes,  or  "greenbacks"). — 
They  are  a  legal  tender  in  payment  of  all  debts,  public  and  private,  within 
the  United  States,  except  duties  on  imports  and  interest  on  the  public  debt. 

Demand  Treasury  notes  authorized  by  the  act  of  July  17,  1861,  and 
the  act  of  February  12,  1862,  are  lawful  money  and  a  legal  tender  in 
like  manner  as  United  States  notes. 

One  and  tivo-year  notes  of  1863. — These  notes,  redeemable  one  year 
from  date  and  two  years  from  date,  bearing  interest  at  five  per  centum 
per  annum,  are  a  legal  tender  for  their  face  value,  exclusive  of  interest. 

Compound  interest  notes. — These  notes  were  payable  at  any  time  after 
three  years  from  date,  and  bearing  interest  not  exceeding  seven  and  three- 
tenths  per  centum,  payable  in  lawful  money  at  maturity,  or,  at  the  dis- 
cretion of  the  Secretary  of  the  Treasury,  semi-annually;  and  such  of  them 
as  should  be  made  payable,  principal  and  interest,  at  maturity,  to  be  a  legal 
tender  to  the  same  extent  as  United  States  notes  for  their  face  value,  exclud- 
ing interest. 

Treasury  notes  of  1890  are  a  legal  tender  in  payment  of  all  debts,  pub- 
lic and  private,  except  where  otherwise  expressly  stipulated  in  the  con- 
tract, and  are  receivable  for  customs,  taxes,  and  all  public  dues- 

Columbian  half-dollars  are  a  legal  tender  to  the  same  extent  as  sub- 
sidiary silver  coin,  i.  e.  ten  dollars  in  any  one  payment. 

Columbian  quarters  are  a  legal  tender  to  the  same  extent  as  subsidiary 
coin,  i.  e.  ten  dollars  in  any  one  payment. 

NOT  LEGAL  TENDER. 

Gold  certificates  are  not  a  legal  tender.  They  are  receivable  for 
customs,  taxes,  and  all  public  dues. 

Silver  certificates  are  not  a  legal  tender.  They  are  receivable  for  cus- 
toms, taxes,  and  all  public  dues. 

National  bank  notes  are  not  a  legal  tender.  They  are  receivable  at  par 
in  all  parts  of  the  United  States  in  payment  of  taxes,  excises,  public  lands, 
and  all  other  dues  to  the  United  States,  except  duties  on  imports ;  and  also 
for  all  salaries  and  other  debts  and  demands  owing  by  the  United  States 
to  individuals,  corporations,  and  associations  within  the  United  States, 
except  interest  on  the  public  debt,  and  in  redemption  of  the  national  cur- 
rency. 

Trade  dollars  are  not  a  legal  tender-     By  the  act  of  February  12,  1873, 


284  SMITH'S  FINANCIAL  DICTIONARY. 

they  were  a  legal  tender  at  their  nominal  value  for  any  amount  not 
exceeding  five  dollars  in  any  one  payment,  but  under  date  of  July  22, 
1876,  it  was  enacted  that  the  trade  dollar  should  not  thereafter  be  a 
legal  tender. 

Fractional  currency  is  not  a  legal  tender.  [Note:  It  was  receivable 
for  postage  and  revenue  stamps,  and  also  in  payment  of  any  dues  to  the 
United  States  less  than  five  dollars,  except  duties  on  imports]. 

Foreign  'gold  coins  are  not  a  legal  tender  in  payment  of  debts. 

Foreign  silver  coins  are  not  a  legal  tender  in  payment  of  debts. 

Continental  currency. — The  question  has  been  raised  and  disputed 
as  to  whether  what  was  called  the  "Continental  currency,"  issued  during  the 
War  of  the  Revolution  by  the  old  government,  was  or  was  not  legal  tender. 
The  facts  appear  to  be  that  while  the  Continental  Congress  did  not  by 
any  ordinance  attempt  to  give  it  that  character,  it  asked  the  States  to 
do  so,  and  all  seem  to  have  complied  except  Rhode  Island.  The  Con- 
tinental Congress  only  enacted  that  the  man  who  refused  to  take  the 
money  should  be  deemed  an  enemy  of  his  country. — "The  National 

Loans,"  by  Rafael  A.  Bayley,  of  the  Treasury  Department;  prepared  for 
the  tenth  census. 

The  Constitution  prohibits  the  several  states  from  making 
anything  but  gold  and  silver  coin  a  legal  tender  in  payment  of 
debts. 

Where  a  contract  stipulates  for  payment  in  coin  the  debtor 
is  not  privileged  to  make  payment  in  paper  money  or  in  any 
currency  other  than  that  specified  in  the  contract. 

Legal  tender  certificate.  Same  as  currency  certificate ;  for 
information  see  Currency  certificate. 

Legal  tender  note.  Another  name  for  United  States  note; 
see  United  States  note. 

Legal  tender  power.  The  power  possessed  by  money,  as 
confirmed  by  law,  to  discharge  indebtedness. 

Lending  stocks.     See  Borrowing  and  lending  stocks. 

Letter  head.  The  printed  heading  of  a  sheet  of  letter-paper ; 
or  the  sheet  bearing  such  a  heading. 

Letter  of  advice.  A  letter  giving  special  information,  as 
from  a  consignor  to  a  consignee  or  from  an  agent  to  a  princi- 
pal or  from  drawer  to  drawee  of  a  bill  of  exchange.  The  term 
is  often  abbreviated  to  advice. 

In  the  foreign  exchange  business  it  is  the  practise  for  the 
seller  of  a  bill  of  exchange  to  send  a  letter  of  advice  to  the 
drawee  (the  one  upon  whom  the  bill  is  drawn).  This  letter 
of  advice  constitutes  notice  to  the  drawee  that  the  bill  of  ex- 


SMITH'S  FINANCIAL  DICTIONARY.  285 

chang-e  in  question  has  been  issued  and  it  may  contain  other 
information    or  instructions. 

Letter  of  allotment.  A  letter  informing  an  applicant  for  se- 
curities of  a  new  company  (or  new  securities  of  an  existing 
company)  of  the  amount  allotted  to  him. 

Letter  of  credit.  See  Circular  letter  of  credit ;  see  Commer- 
cial letter  of  credit. 

Letter  of  delegation.  A  letter  conferring  authority  on  an- 
other to  collect  an  amount  due. 

For  instance,  a  merchant  in  New  York  may  have  shipped 
goods  to  a  merchant  in  Chicago.  The  New  York  merchant 
authorizes  (delegates)  a  bank  in  New  York  to  collect  pay- 
ment for  the  goods  and  confers  the  authority  to  do  so  in  a  let- 
ter of  delegation,  so-called,  which  is  accompanied  by  the 
bill  of  lading.  The  bank  in  New  York  forwards  the  letter  and 
bill  of  lading  to  the  bank  in  Chicago  which  acts  as  its  corre- 
spondent there  and  which  makes  the  collection. 

Again,  a  merchant  in  New  York  may  have  shipped  goods  to 
a  merchant  in  London.  The  New  York  merchant  authorizes 
(delegates)  a  dealer  in  foreign  exchange  in  New  York  to  col- 
lect payment  for  the  goods  and  confers  the  authority  to  do  so 
in  a  letter  of  delegation,  which  is  accompanied  by  the  bill  of 
lading,  policy  of  insurance,  etc.  The  dealer  in  exchange  trans- 
fers the  letter  with  the  bill  of  lading,  etc.,  to  his  correspondent 
in  London  who  makes  the  collection. 

Letter  of  indication.  The  letter  of  identification  given  by  a 
dealer  in  exchange  to  the  purchaser  of  a  traveler's  letter  of 
credit  (circular  letter  of  credit)  or  to  the  purchaser  of  circular 
notes.  For  additional  information  see  Circular  letter  of  credit ; 
also  see  Circular  note. 

Letter  of  license.  A  document  by  which  creditors  agree  to 
permit  a  debtor  to  continue  business  or  to  pay  in  such  amounts 
or  at  such  times  as  are  therein  specified. 

Also  see  Bank  act. 

Letter  of  regret.  A  letter  sent  to  a  subscriber  for  new  se- 
curities intimating  that  none  of  the  amount  applied  for  has 
been  allotted  to  him. 

Letter  press.  A  press  used  in  making  copies  of  business 
letters. 


286  SMITH'S  FINANCIAL  DICTIONARY. 

Levy,  A  name  applied  in  the  Southern  and  Western  statt-s 
to  the  old  Spanish  real,  or  its  equivalent,  12  1-2  cents. 

Liabilities.     Obligations ;  debts. 

Liability.     Responsibility  for  loss  or  damage ;  an  obligation. 

For  the  liability  of  an  agent  (or  broker)  see  Agent. 

Liability  of  an  acceptor.     For  information  see  Acceptance. 

Liability  of  an  indorser.     For  information  see  Indorsement. 

Lien.  A  legal  claim  or  hold  on  property  as  security  for  a 
debt  or  a  charge.     A  mortgage  is  a  lien. 

Lienor.     The  holder  of  a  lien. 

Limit.  A  Wall  Street  term  for  an  order  from  a  client  to  a 
broker  to  buy  for  him  not  above  a  certain  price  or  limit  or  to 
sell  for  him  not  below  a  certain  price  or  limit. 

Also  see  Stop  order. 

Limitation.  The  length  of  the  period  in  which  the  right  ex- 
ists to  institute  legal  proceedings  to  enforce  the  collection  of  a 
debt.  The  length  of  this  period  varies  in  the  different  states. 
When  the  period  has  elapsed  the  debt  is  said  to  have  been  out- 
lawed. 

Limited  legal  tender.  Subsidiary  silver  coins  (coins  of  de- 
nominations less  than  $1)  and  minor  coins  (the  5-cent  nickel 
and  the  i-cent  bronze)  are  limited  legal  tender.  Subsidiary 
silver  coins  are  legal  tender  only  ta  the  amount  of  $10  and 
minor  coins  are  legal  tender  only  to  the  amount  of  25  cents. 

For  additional  information  see  Legal  tender. 

Limited  liability.  Corporations  in  certain  states  may  em- 
ploy the  word  "Limited"  in  their  title,  thus  signifying  that 
their  stockholders  are  exempted  from  personal  liability  under 
the  law.  "Limited"  corporations  are  more  common  in  Eng- 
land than  in  the  United  States. 

Limited  liability  company.  One  in  which  stockholders  are 
individually  limited  in  their  liability  for  the  company's  debts 
to  the  amount  of  stock  that  they  hold ;  in  other  words  they  can 
lose  only  what  they  have  paid  for  their  stock. 

Limited  order.  In  stocks,  an  order  where  stock  is  to  be 
bought  below  or  at  a  price  named ;  or  where  the  stock  is  to  be 
sold  above  or  at  the  price  named. 

Limited  partnersnip.  A  partnership  consisting  of  general 
and  special  partners,  the  general  partners  managing  the  busi- 


SMITH'S  FINANCIAL  DICTIONARY.  2S7 

ness  and  the  special  partners  contributing  capital  with  liability 
limited  to  the  capital  so  contributed. 

Limit  to  cut  loss.  London  Stock  Exchange  term  which 
means  the  same  as  the  New  York  Exchange  term  stop-loss  or- 
der.    For  additional  information  see  Stop  order. 

Limping  standard.  This  term  is  applied  to  the  monetary 
system  of  a  country  which  originally  maintained  the  double 
standard,  but  which  has  suspended  the  free  coinage  of  silver 
without  definitely  adopting  the  gold  standard.  France  is  such 
a  country.  According  to  its  monetary  laws  it  still  is  a  double 
standard  country,  but  the  gold  standard  is  actually  in  use.  Its 
mints  are  now  open  to  the  free  coinage  of  gold  only  and  the 
silver  in  circulation  instead  of  passing  at  its  bullion  value  cir- 
culates, by  reason  of  the  restricted  coinage  of  it.  at  the  value  of 
gold.     It  is  the  gold  standard  with  a  "limp." 

Line.  The  word  line  is  often  used  as  a  synonym  for  rail- 
road. For  instance,  the  Pennsylvania  Railroad  is  not  infre- 
quently spoken  of  as  the  Pennsylvania  line. 

Also,  line  is  sometimes  used  to  designate  a  particular  issue  of 
bonds,  as  main  line  bonds,  meaning  bonds  issued  under  a  mort- 
gage on  the  main  line  (of  a  railroad)  ;  or,  branch  line  bonds, 
meaning  bonds  issued  under  a  mortgage  on  a  branch  line  of  a 
railroad. 

Line  of  deposit.  The  average  amount  in  a  given  period  to 
the  credit  of  a  depositor  in  a  bank. 

Line  of  discount.  The  average  amount  of  a  dealer's  dis- 
counts or  loans  from  a  bank ;  the  average  amount  of  credit 
which  a  bank  extends  to  a  depositor. 

Line  of  stocks  (or  of  grain,  cotton,  coffee,  etc).  A  specu- 
lator is  said  to  have  a  line  of  stocks  when  he  is  long  or 
short  of  several  stocks ;  the  term  line  more  particularly  applies 
when  the  stocks  have  been  bought  or  sold  short  systematic- 
ally, as  on  a  scale  (see  On  a  scale)  ;  or  in  anticipation  of  an  ad- 
vance  or  decline    in  which  all  will  participate  simultaneously. 

Likewise,  a  speculator  is  said  to  have  a  line  of  grain  or  of 
cotton,  cofifee,  etc.,  when  he  has  bought  or  sold  for  future  de- 
livery in  various  months  and  at  varying  prices. 

Liquid  assets.  Practically  the  same  as  quick  assets ;  assets 
in  cash  or  readilv  convertible  into  cash.     The  assets  of  a  bank, 


288  SMITH'S  FINANCIAL  DICTIONARY. 

for  instance,  are  liquid  assets  when  they  are  not  tied  up  in  time 
loans  or  in  securities  which  cannot  promptly  be  turned  into 
money. 

Liquidated  damages.  Damages  determined  as  to  amount 
either  by  agreement  or  by  a  judgment. 

Liquidation.  Settling  or  winding  up ;  in  speculation,  clos- 
ing of  transactions   either  compulsorily  or  voluntarily. 

Listed  stocks.  Stocks  which  have  been  placed  on  the  regu- 
lar list  of  the  New  York  Stock  Exchange  and  thereby  admitted 
to  dealings  at  the  exchange.  For  details  as  to  listed  stocks  see 
Admitted  to  dealings  at  the  New  York  Stock  Exchange. 

Literature.  A  name  given  to  circulars  or  pamphlets  whicii 
describe  an  undertaking,  scheme  or  plan ;  or  which  contain  in- 
formation as  to  an  issue  of  bonds  or  stock. 

LL.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  leased  line,  as  leased  line  bonds. 

Lloyds.  An  association  of  English  underwriters  of  marine 
insurance  which  also  collects  and  distributes  maritime  intelli- 
gence. The  corporation  requires  from  each  firm  of  underwrit- 
ers security  to  meet  its  obligations.  It  issues  "Lloyds'  Regis- 
ter" and  other  publications  compiled  from  the  reports  of  its 
agents  in  various  parts  of  the  world. 

Loaded  up.  A  Wall  Street  term  which  is  applied  to  a  specu- 
lator who  is  carrying  more  stocks  than  is  advisable. 

Loan.  Money  lent  the  borrower  of  which  pays  interest  on 
it  while  he  has  the  use  of  it.  See  Call  loan  ;  also  see  Time  loan  ; 
also  see  Collateral  loan. 

Loanable  capital.  Money  possessed  by  money  lenders  or 
the  money  held  by  banks  which  is  available  to  borrowers. 

Loan  and  trust  company.  An  incorporated  banking  institu- 
tion empowered  by  its  charter  to  accept  and  execute  trusts  as 
provided  by  law ;  to  receive  deposits  of  money  and  other  per- 
sonal property  and  issue  obligations  therefor  and  to  lend 
money  on  real  and  personal  securities.  Such  an  institution  is 
not  permitted  to  issue  bills  to  circulate  as  money.  It  cannot 
lend  money  at  more  than  the  legal  rate  on  time  and  is  not 
obliged  to  keep  a  lawful  money  reserve. 

Loan  certificate.     See  Clearing  house  loan  certificate. 

Loan  crowd.     The  name  applied  to  the  gathering  of  brokers 


SMITH'S  FINANCIAL  DICTIONARY.  289 

on  the  New  York  Stock  Exchange  who  desire  to  borrow  or 
lend  stocks.  For  additional  information  see  Borrowing  and 
lending  stocks. 

■Loaned  and  borrowed  securities.  See  Borrowing  and  lend- 
ing stocks. 

Loan-monger.  A  negotiator  of  loans  ;  one  who  obtains  loans 
for  others,  but  is  not  a  lender  himself.  The  term  is  not  in  com- 
mon use. 

Loan  society.  A  society  organized  to  loan  money,  receiv- 
ing it  back  in  instalments    with  interest. 

Lock-up.  A  colloquial  banking  term  applied  to  a  note  or 
other  piece  of  paper  which  has  been  renewed^that  is,  the  time 
for  payment  extended  beyond  the  original  date.  The  term  is 
derived  from  the  fact  that  the  money  represented  by  the  paper 
was  not  delivered  when  due  but  is  withheld  or  locked  up  for  a 
further  period. 

Logical  conditions  or  a  logical  market.  Logical  conditions 
exist  in  a  stock  when  the  price  advances  in  consequence  of  the 
prosperity  of  the  company  which  issued  it,  or  such  conditions 
exist  when  the  price  declines  in  consequence  of  the  lack  of 
prosperity  of  the  company.  Or,  it  may  be  that  the  price  ad- 
vances or  declines  on  unexpected  developments  in  the  affairs 
of  the  company  or  on  prospective  conditions  affecting  the  com- 
pany. 

A  logical  market  exists  when  the  market  as  a  whole  moves 
(advances  or  declines)  in  accordance  with  general  natural  con- 
ditions. 

Lombard  Street.  Lombard  street  itself  is  a  street  in  Lon- 
don largely  composed  of  banks,  but  the  name  Lombard  Street 
applies  to  the  whole  of  the  banking  centre  of  London.  The 
Lombard  Jews  began  banking  in  Italy  in  808.  Some  of  these 
Lombards  afterward  went  to  London  and  settled  in  the  narrow 
thoroughfare  which  is  called  after  them,  Lombard  street. 

London  clause.  The  name  given  to  a  clause  inserted  in  a 
bill  of  lading  which  relieves  the  vessel  from  the  payment  of 
handling  or  dock  charges  on  the  cargo  when  landed  at  London 
and  imposes  such  charges  on  the  shipper. 

London  prices.  The  term  London  prices  as  generally  em- 
ployed in  New  York  means  the  prices  on  the  London  Stock 


290  SMITH'S  FINANCIAL  DICTIONARY. 

Exchange  of  American  stocks.     For  information  see  American 
stocks  in  London. 

London  quotations.  A  quotation  on  the  London  Stock  Ex- 
change merely  means  the  price  at  which  the  jobber  or  dealor 
(practically  a  wholesaler  in  shares,  that  is,  stocks)  will  either 
buy  or  sell,  and  he  will  do  either.  Thus,  when  a  jobber  quotes 
99  3-4 — 100  1-4  it  means  that  he  will  buy  at  99  3-4  or  will  sejl 
at  100  1-4.  When  in  giving  a  quotation  the  middle  price  is 
named  it  means  the  price  midway  between  the  jobber's  buying 
and  selling  prices.  In  a  regular  quotation  99  3-4 — 100  1-4  the 
middle  price  is  100. 

On  the  New  York  Stock  Exchange  the  quotations  (except 
the  bid  and  asked  quotations)  are  the  prices  at  which  actual 
transactions  took  place.  The  bid  and  asked  quotations  are 
those  printed  by  the  ticker  on  the  tape  after  the  close  of 
the  stock  exchange  and  while  nominal  are  as  nearly  the  ac- 
tual prices  offered  for  or  asked  for  stocks  as  are  possible  to 
obtain.  They  are  furnished  by  the  specialists  in  the  different 
stocks — the  brokers  who  make  a  specialty  of  executing  orders 
in  those  stocks.  The  bid  and  asked  prices  are  the  only  gage 
to  the  market  value  of  stocks  infrequently  dealt  in,  especially 
those  in  which  one  or  more  days  elapse  between  transactions. 

Also  see  Quotation. 

London  Stock  Exchange.  The  official  title  of  the  London 
Stock  Exchange  is  "The  Stock  Exchange  of  London."  It  was 
founded  toward  the  close  of  the  seventeenth  century. 

The  London  Stock  Exchange  consists  of  two  distinct  bodies. 
One  body  comprises  the  shareholders  or  proprietors  of  the 
company  which  owns  the  building  and  the  title  "The  Stock  Ex- 
change of  London."  The  other  body  comprises  the  subscrib- 
ers, who  are  described  as  members  of  the  exchange  or  "house." 

To  the  shareholders  the  exchange  is  a  joint-stock  undertak- 
ing from  the  profits  of  which  they  receive  dividends  the  same 
as  the  shareholders  of  an)'-  corporation.  The  shareholders  as 
shareholders  have  no  right  to  enter  the  building,  but  they  may 
become  members  under  the  same  conditions  as  other  subscrib- 
ers. Very  few  shareholders  are  now  non-members  and  while 
such  was  not  formerly  the  case  only  subscribers  (members") 
may  now  become  shareholders  in  the  proprietary  company. 


SMITH'S  FINANCIAL  DICTIONARY.  291 

The  subscribers  or  members  of  the  exchange  merely  rent 
the  building  with  the  right  to  transact  business  under  the  title 
of  "The  Stock  Exchange  of  London."  The  members  are  elect- 
ed for  one  year,  beginning  March  25,  and  in  order  to  contimie 
as  members  they  must  be  reelected  each  succeeding  year. 
Members  are  elected  (or  rejected)  by  the  governing  body  of 
the  exchange  which  bears  the  title  of  "committee  for  gener.il 
purposes."  This  committee  itself  is  annually  elected  by  the 
members.  Members  of  the  exchange  on  their  original  admis- 
sion have  to  pay  an  initiation  fee  as  well  as  annual  dues  and 
have  to  find  existing  members  to  act  as  surety  for  them.  On 
reelection  they  have  not  to  pay  another  initiation  fee,  but 
they  continue  to  pay  annual  dues.  These  dues  are  used  in 
payment  of  rental  to  the  proprietary  company  and  in  payment 
of  administration  expenses. 

There  are  two  classes  of  members,  jobbers  (or  dealers)  and 
brokers.  Members  can  act  in  either  capacity,  but  not  in  the 
double  capacity  at  the  same  time.  The  jobber  remains  in  one 
place  in  the  house  ready  to  deal  with  any  one  who  comes  to 
him.  The  broker  buys  and  sells  for  the  public  for  a  compensa- 
tion, that  is,  a  commission,  whereas,  the  jobber  makes  the  mar- 
ket and  is  prepared  to  buy  from  or  sell  to  the  broker,  covering 
his  bargain  with  a  fresh  purchase  or  sale.     See  Jobber. 

London  Stock  Exchange  clearing  house.  In  a  room  in  the 
exchange  designated  as  the  clearing  house  stock  differences 
are  settled.  The  purpose  of  the  clearing  house  is  to  avoid  a 
multiplicity  of  deliveries  by  making  merely  deliveries  of  bal- 
ances. 

Illustration :  If  a  member  has  sold  in  varying  amounts  to 
several  other  members  £25,000  of  a  particular  stock  and  has 
purchased  in  varying  amounts  from  several  other  members 
£24,000  of  the  same  stock  there  is  a  balance  of  £1,000 — the 
member  has  sold  £1,000  more  than  he  has  bought.  In  other 
words,  his  sales  have  ofYset  his  purchases  of  £24,000,  but  there 
is  a  balance  of  £1,000  in  sales  in  excess  of  purchases. 

The  member  reports  at  the  clearing  house  both  sales  and 
purchases  in  detail  for  the  purpose  of  record  and  comparison, 
but  it  is  only  in  the  adjustment  of  the  balance  or  difference 
that  the  clearing  house  acts.     There  are,  of  course,  as  many 


292  SMITH'S  FINANCIAL  DICTIONARY. 

purchases  as  there  are  sales  in  each  stock  dealt  in  on  the  ex- 
change, so  that  some  other  member  has  bought  £i,ooo  of  the 
stock  in  question  more  than  he  has  sold.  The  member  who 
has  sold  £i,ooo  more  than  he  has  bought  and  the  member  who 
has  bought  £i,ooo  more  than  he  has  sold  are  brought  together 
by  the  clearing  house.  The  clearing  house  gives  to  the  first 
a  ticket  or  memorandum  directing  him  to  deliver  his  excess 
of  £i,ooo  in  sales  to  the  second  and  at  the  same  time  it  gives 
to  the  second  a  ticket  directing  him  to  receive  from  the  first 
the  £i,ooo  in  order  to  make  up  his  (the  second  member's)  ex- 
cess of  £i,ooo  in  purchases. 

Thus,  a  single  settlement  may  adjust  and  dispose  of  a  num- 
ber— perhaps  a  dozen  or  a  score- — of  separate  transactions. 
The  member  who  sold  £i,ooo  more  than  he  bought  may  be 
directed  to  deliver  £500  to  a  second  member  and  £500  to  a 
third  member,  but  the  principle  involved  and  the  outcome  is 
the  same. 

Also  see  New  York  Stock  Exchange  clearing  house. 

Long.  A  speculator  who  has  bought  stocks  is  long — long 
of  stocks ;  he  is  a  bull.  The  opposite  of  this  term  is  short  and 
a  speculator  who  is  short  of  stocks  is  a  bear. 

On  the  London  Stock  Exchange  it  is  the  custom  to  say  that 
a  speculator  is  bull  of  stocks  instead  of  long  of  stocks  as  is 
said  on  the  New  York  Stock  Exchange.  Likewise,  a  specu- 
lator is  said  to  be  bear  of  stocks  instead  of  short  of  stocks  as 
is  said  on  the  New  York  exchange. 

Long  account.  A  term  applied  to  the  collective  purchases 
of  a  particular  stock  or  to  collective  purchases  of  stocks  in  gen- 
eral, which  purchases  are  in  expectation  of  a  rise  in  the  price 
of  the  particular  stock  or  in  the  prices  of  stocks  in  general. 
The  term  also  applies  to  corresponding  purchases  of  grain, 
cotton,  coffee,  etc. 

Long  and  short  haul  clause.  The  designation  for  a  clause 
in  the  Interstate  commerce  law  which  forbids  a  greater  charge 
in  the  aggregate  for  the  transportation  of  freight  for  a  shorter 
than  for  a  longer  distance  by  the  same  line  in  the  same  direc- 
tion under  substantially  similar  conditions. 

Long  bill.  Same  as  long-dated  bill ;  a  bill  of  foreign  ex- 
change (draft")  liaving  a  long  time  to  run.     A  bill  running  for 


SMITH'S  FINANCIAL  DICTIONARY.  293 

60  days  or  more  is  usually  termed  a  long  bill  or  a  long-dated 
bill. 

A  long  bill  of  exchange  is  sold  at  a  lower  price  than  a  short 
or  demand  bill  because  the  buyer  loses  the  use  of  his  money, 
which  is  the  same  as  saying  he  loses  interest  on  his  money, 
until  the  bill  falls  due. 

Long  bit.  A  term  used  in  the  Southern  and  Western  stat  ;s, 
meaning  15  cents.  It  is  derived  from  the  Spanish  real,  which 
used  to  circulate  in  those  states  and  was  called  a  bit  and  was 
worth,  nominally,  12  1-2  cents. 

Long-dated  bill.     Same  as  long  bill ;  see  Long  bill. 

Long  haul.  A  railroad  term  signifying  transportation  (of 
freight)  for  a  long  distance,  in  contradistinction  to  trans- 
portation for  a  short  distance,  which  is  called  short  haul. 

Also  see  Long  and  short  haul  clause. 

Long  interest.  The  collective  speculative  holding  of  a  par- 
ticular stock  or  of  stocks  in  general ;  the  opposite  of  short 
interest.  The  expression  "The  long  interest  in  the  market," 
for  example,  signifies  the  aggregate  speculative  holdings  of 
stocks  in  general. 

Long  of  exchange.  When  a  dealer  in  (foreign)  exchange 
has  purchased  and  holds  commercial  or  other  bills  exceeding 
in  amount  bills  of  his  own  which  he  has  sold  and  which  are 
outstanding  he  is  long  of  exchange. 

For  additional  information  see  Foreign  exchange. 

Long  sterling.  A.  name  for  a  long  bill  of  exchange  payable 
in  sterling;  see  Long  bill. 

Long-term  bond.  Same  as  long-time  bond ;  one  not  matur- 
ing for  a  long  time  (or  term). 

Long-time  bond.     One  not  maturing  for  a  long  time. 

Long  ton.  Same  as  gross  ton  ;  2,240  pounds ;  a  short  ton  is 
2,000  pounds.     A  metric  ton  is  2,204.6  pounds. 

Lost  or  stolen  securities.  A  coupon  bond  payable  to  bear- 
er or  a  stock  certificate  assigned  in  blank  is  good  in  the  hands 
of  an  innocent  and  bona  fide  holder  who  acquires  it  by  honest 
purchase  at  a  fair  market  price  without  knowledge  that  it  was 
fraudulently  obtained  by  any  previous  holder  even  though  it 
mav  have  lieen  lost  bv  or  stolen  from  its  owner. 


294  SMITH'S  FINANCIAL  DICTIONARY. 

The  recovery  of  a  lost  or  stolen  bond  or  stock  certificate 
can  rarely  be  accomplished  unless  it  is  found  in  the  hands  of 
the  finder  or  of  the  thief  or  his  accomplice  or  some  person 
who  has  obtained  possession  of  it  by  fraud  or  under  circum- 
stances which  will  convict  him  of  knowledge  or  suspicion  of 
fraud  on  the  part  of  the  one  from  whom  he  received  it. 

The  fact  that  a  lost  or  stolen  bond  or  stock  certificate  has 
been  advertised  by  its  number  does  not  invalidate  the  title  of 
an  innocent  holder  as  it  cannot  be  held  that  the  purchaser  of 
a  bond  or  a  stock  certificate  is  bound  to  have  knowledge  of  the 
advertisement. 

A  registered  bond  is  without  coupons  and  is  filled  in  with 
the  name  of  the  registered  owner  and  is  payable  to  him  or  his 
assigns.  It  is  not  available  to  any  other  person  until  properly 
assigned  or  transferred  by  the  registered  owner.  If  a  regis- 
tered bond  or  a  stock  certificate  not  assigned  in  blank  is  lost 
or  stolen  the  owner  can  secure  a  new  bond  or  certificate  by 
furnishing  a  bond  of  indemnity. 

Lot  money,  A  charge  made  by  an  auctioneer  for  each  lot  of 
goods  sold  by  him. 

Lottery  bond.  A  lottery  bond  is  one  of  an  issue  made  (gen- 
erally by  some  government  on  the  Continent  of  Europe)  for 
some  exceptional  work,  as  an  exhibition,  bonuses  being  of- 
feied  to  subscribers  in  the  shape  of  cash  prizes  which  are 
drawn  for  periodically,  the  prizes  going  to  the  holders  of  bonds 
which  bear  numbers  corresponding  to  those  drawn. 

Louis.  A  colloquial  name  for  the  20-franc  gold  piece  of 
France,  equal  to  $3.85.90;  the  name  is  derived  from  a  gold  coin 
of  France  of  the  seventeenth  and  eighteenth  centuries. 

L.  s.  d.  Pounds,  shillings,  pence;  collectively  the' abbrevia- 
tion is  used  in  Great  Britain  to  signify  money. 

Lump  sum.     A  gross  sum  covering  several  items. 

Lying  down.  This  is  a  Wall  Street  colloquialism.  When  a 
speculator  refuses  to  reimburse  or  evades  liability  to  his 
broker  for  losses  he  lies  down — lies  down  on  his  broker.  The 
same  term  applies  to  an}'-  one  who  refuses  to  make  good  or 
evades  an  obligation  of  an}'  kind. 


SMITH'S  FINANCIAL  DICTIONARY.  295 


M 


Made.  The  signer  of  a  promissory  note  is  said  to  have  made 
the  note. 

Made  and  closed.  A  speculative  term,  meaning-  a  completed 
transaction — buying  and  then  selling,  or  the  reverse,  selling 
and  then  buying;  the  term  is  little  used  in  stock  dealings,  but 
is  common  in  dealings  in  grain,  cotton,  coffee,  etc. 

Made  merchantable.     Abbreviation,  M/m. 

Mailing  securities.  For  directions  seen  Investment  securi- 
ties. 

Maize.  Indian  corn ;  in  the  United  States  simply  called 
corn.  In  the  English  market  reports  when  maize  is  mentioned 
corn  is  meant.  In  England  corn  means  w^heat  specifically, 
but  the  term  is  applied  to  v^heat,  barley,  rye  and  oats  collec- 
tively. 

Make-down.  When  in  order  to  effect  a  make-up  (see  Make- 
up) on  the  London  Stock  Exchange  a  firm  opens  an  account 
for  this  purpose  with  another  firm  the  stocks  or  shares  con- 
cerned are  said  to  be  made  down ;  the  name  for  the  transac- 
tion is  make-down. 

Maker.  Designation  for  the  signer  of  a  negotiable  instru- 
ment, as  a  promissory  note,  draft  (bill  of  exchange)    or  check. 

Make-up.  Stocks  or  shares  are  said  on  the  London  Stock 
Exchange  to  be  made  up  when  by  means  of  bookkeeping 
cross  entries  the  purchases  and  sales  are  settled  without 
actual  passing  of  the  securities;  the  name  for  the  operation 
is  make-up.     Also  see  Make-down. 

Making  a  market.  A  Wall  Street  term  which  means  mak- 
ing a  show  of  demand  and  activity  in  a  stock  with  the  object 
of  inducing  outsiders  to  buy. 

Making  a  price.  A  stock  market  term ;  when  a  seller  at 
the  request  of  a  buyer  names  the  price  at  which  he  will  sell 
or  a  buyer  at  the  request  of  a  seller  names  a  price  at  which 
he  will  buy   a  price  is  made. 

On  the  London  Stock  Exchange  when  a  jobber  (practically 
a  wholesaler  of  stocks)  is  asked  by  a  broker  to  make  a  price 


2g>6  SMITH'S  FINANCIAL  DICTIONARY. 

he,  not  knowing  whether  the  broker  is  buyer  or  seller,  names 
the  price  at  which  he  will  buy  and  the  price  at  which  he  will 
sell  and  the  broker  then  deals.  For  instance,  a  broker  who 
has  £i,ooo  consols  to  sell  asks  a  jobber  to  make  him  a  price 
in  consols ;  the  jobber  replies  "96  3-4 — 7-8"  and  the  broker  says 
"Sell  you  £1,000,"  meaning  that  he  sells  the  stock  at  96  3-4; 
the  jobber  then  seeks  to  undo  the  bargain  by  selling  the  stock 
to  another  jobber  at  96  13-16,  taking  his  "turn"  of  1-16. 

Making-up  day.  Same  as  contango  day  or  continuation  day ; 
the  first  day  of  the  settlement  on  the  London  Stock  Ex- 
change when  settling  prices  are  announced  and  when,  also, 
the  rates  for  carrying-over  or  continuing  bargains  (contracts) 
are   fixed.     For  additional  information   see   Settlement,  The. 

Making-up  price.  Settling  price  at  the  New  York  Stock 
Exchange  clearing  house.  For  information  see  New  York 
Stock  Exchange  clearing  house. 

Making-up  prices  on  the  London  Stock  Exchange  are  prices 
at  which  stocks  in  which  there  is  any  speculative  account  are 
made  up  or  continued  or  carried  over  from  one  settlement  to 
another.  For  instance,  if  one  operator  buys  £  1,000  consols  and 
does  not  wish  to  pa}^  for  the  stock  or  sell  it  when  the  settlement 
comes  1)ut  to  continue  the  bargain  in  the  expectation  of  a 
rise  in  the  price  he  instructs  his  broker  to  carry  the  stock  over 
lor  him.  The  broker  finds  either  a  bear  or  a  money  lender  who 
will  take  in  the  stock  on  receipt  of  a  contango  and  carries 
over  the  stock  with  him ;  that  is  to  say,  sells  the  stock  to  him 
for  cash  and  buys  it  again  for  the  new  account,  both  bargains 
being  carried  out  at  the  "making-up"  price.  The  making-up 
price  is  thus  always  a  single  price  and  is  not  quoted  double 
as  ordinary  prices  are  in  London. 

Mala  fide.       Not  in  good  faith. 

Manifest.  A  document  giving  the  items  of  a  vessel's  cargo, 
with  the  names  of  consignees. 

Manipulation.  In  stock  si)eculation  this  word  is  applied  to 
the  operation  of  working  stocks  up    or  down    or  both  ways. 

A  not  uncommDU  method  of  manipulating  a  stock  is  by  wash- 
ing, which  consists  in  buying  and  selling  the  stock  at  the  same 
time.  'I"he  s|)cculalor  who  seeks  to  advance  a  stock  in  price 
1)y  maiii])ulati()n  gives  to  one  broker  an  order  to  bid  it  up  on  a 


SMITH'S  FINANCIAL  DICTIONARY.  297 

scale  (that  is,  after  each  transaction  in  the  stock  to  offer  to  buy 
a  certain  amount  of  the  stock  at,  say,  1-8  of  i  per  cent  above 
the  last  price).  To  another  broker  the  speculator  gives  an  order 
to  simultaneously  sell  the  same  amount  of  the  stock  at  the  ad- 
vancing prices.  Thus,  the  speculator  raises  the  price  of  the 
stock  without  actually  acquiring  any  stock.  If  the  speculator 
seeks  to  depress  a  stock  in  price  the  method  pursued  is  the 
same.  To  one  broker  is  given  an  order  to  offer  the  stock  down 
(that  is,  after  each  transaction  in  the  stock  to  offer  to  sell  it 
at,  say,  1-8  per  cent  below  the  last  price).  To  another  broker 
is  given  an  order  to  buy  the  stock.  These  offsetting  buying 
and  selling  orders  which  result  in  no  accumulation  of  stock  are 
known  as  wash  or  matched  orders ;  and  the  process  of  ad- 
vancing (or  depressing)  prices  by  wash  or  matched  orders  is 
known  as  marking  up  (or  marking  down)  prices. 

A  pool  may  be  formed  in  a  stock  to  manipulate  it.  The  con- 
tributors to  the  pool  (mutual  fund)  appoint  a  manager  of  it 
who  conducts  the  operations  in  the  stock.  If  it  is  a  bull  pool 
the  first  step  is  to  buy  as  much  stock  as  is  desired  at  as  low 
prices  as  possible  and  then  by  means  of  wash  transactions  in 
the  stock  advance  the  price  to  a  point  where  the  stock  actually 
held  can  be  sold  at  a  satisfactory  profit.  If  it  is  a  bear  pool  the 
first  step  is  to  sell  short  (sell  stock  not  owned)  to  the  extent 
desired  at  as  high  prices  as  possible  and  then  by  means  of  wash 
transactions  in  the  stock  depress  the  price  to  a  point  where  the 
stock  actually  sold  short  can  be  bought  back  at  a  satisfactory 
profit. 

Manual  signature.  The  signature  of  a  person  in  his  own 
hand. 

Manufacture.  Anything  made  by  industrial  art  or  progress ; 
also,  figuratively,  the  product  or  result  of  any  process,  as 
steel. 

Margin.  The  money  deposited  with  a  broker  by  a  specu- 
lator in  stocks  or  in  grain,  cotton,  coffee,  etc.,  to  protect  the 
broker  against  loss. 

In  stocks  the  margin  required  by  a  broker  ranges  from  5  to 
20  per  cent  of  the  par  (face)  value  according  to  the  character 
of  the  securities.  An  average  margin  is  10  per  cent,  which  is 
equal  to  $1,000  on  100  shares  of  stock   or  $10,000  of  bonds. 


2g8  SMITH'S  FINANCIAL  DICTIONARY. 


When  a  stock  advances  or  declines  in  price  (as  the  case 
may  be)  to  near  the  limit  of  the  margin  furnished  the  broker 
is  privileged  if  the  customer  does  not  respond  to  a  call  for 
additional  margin  to  sell  the  stock  that  has  been  bought  or 
to  buy  back  the  stock  that  has  been  sold  short.  The  broker 
is  bound  to  give  to  the  customer  reasonable  and  custoihary 
notice  when  additional  margin  is  required  unless  there  is  an 
agreement  beforehand  to  the  contrary. 

Stocks  or  bonds  bought  on  margin  by  a  broker  for  a  cus- 
tomer are  at  all  times,  in  the  absence  of  an  express  agreement 
to  the  contrary,  subject  to  the  order  of  the  customer.  The 
customer  has  the  right  to  possession  of  the  stocks  or  bonds 
upon  payment  of  the  purchase  price  and  the  commissions  and 
proper  expenses.  In  the  absence  of  an  express  agreement  the 
broker  may  at  his  option  upon  reasonable  notice  require  a 
customer  to  take  up,  that  is,  pay  in  full  for  the  stocks  which  he 
is  carrying  for  the  customer.  If  the  customer  is  short  of  stocks 
the  broker  may  demand  that  he  buy  back  the  stocks  or  trans- 
fer the  operation  to  another  broker. 

If  a  speculator  buys  on  the  New  York  Stock  Exchange  loo 
shares  of  stock  at  lOO  on  lo  per  cent  margin  his  broker  re- 
ceives the  stock  and  pays  $10,000  for  it  to  the  broker  from 
whom  it  was  purchased.  The  buying  broker  has  received 
$1,000  from  his  customer  and  he  advances  $9,000  to  the  cus- 
tomer, holJmg  the  stock  as  security  for  the  money  so  ad- 
vanced. On  the  $9,000  he  charges  interest  (usually  6  per 
cent).  If  the  stock  is  sold  later  at  no  $11,000  is  received  for 
it.  The  gross  profit  is  $1,000,  but  from  this  amount  is  deducted 
the  broker's  commission  and  the  interest  on  the  money  ad- 
vanced by  the  broker. 

If  a  speculator  sells  a  stock  short  he  puts  up  margin  the 
same  as  when  he  buys  long  stock — buys  not  in  discharge  of  a 
short  contract  but  to  sell  again.  If  the  stock  is  sold  at  too 
and  is  bought  back  at  90  the  speculator's  profit  is  $1,000.  less 
the  broker's  commission.  Ordinarily  no  interest  has  to  be 
paid  on  stock  sold  short.     (For  explanation  see  Interest). 

Margins  usually  required  on  commodities  are:  Grain,  5 
cents  per  bushel  on  5,000  bushels.  $250;  lard,  t-2  cent  per 
pound  on  250  tierces  (85.000  pounds),  v$425 ;  pork.  $t  per 
barrel  on  250  barrels,  $250;  short  ribs,  1-2  cent  per  pound  on 


SMITH'S  FINANCIAL  DICTIONARY.  299 

50,000  pounds,  $250;  cotton,  $i  per  bale  on  100  bales  (50,000 
pounds),  $100;  coffee,  i  cent  per  pound  on  250  bags  (32,500 
pounds),  $325;  silver  bullion,  10  cents  per  ounce  on  1,000 
ounces,  $100. 

For  information  as  to  deposits  of  margin  on  time  contracts 
in  stocks,  grain,  cotton,  coffee,  etc.,  see  ^lutual  deposits  on 
a  contract. 

Marginal  credit.  In  exchange,  particularly  foreign  ex- 
change, the  term  marginal  credit  refers  to  a  commercial  letter 
of  credit  which  may  be  drawn  against  within  the  margin  of 
the  letter,  or  in  other  words,  up  to  the  amount  specified  in  the 
letter. 

Such  a  credit  is  as  a  rule  employed  in  a  triangular  opera- 
tion. Example :  A  merchant  in  New  York  wishes  to  buy 
goods  in  China.  He  procures  a  letter  of  credit  from  a  dealer 
in  foreign  exchange  in  New  York  which  is  to  be  honored  by 
the  correspondent  in  London  of  the  dealer  who  issued  it.  Or- 
dinarily goods  purchased  in  China  by  a  New  York  merchant 
are  paid  for  in  London.  The  New  York  merchant  forwards 
the  letter  of  credit  with  his  order  for  goods  to  the  party  of 
whom  he  is  to  buy  the  goods  in  China.  The  seller  of  the 
goods  in  China  ships  the  goods  and  draws  a  draft  for  the 
amount  of  them  against  the  New  York  merchant's  credit  in 
London.  To  the  draft  is  affixed  the  authorization  to  draw,  the 
letter  of  credit,  and  likewise  the  bill  of  lading  for  the  goods. 
The  draft  is  sold  in  China  and  forwarded  to  London  for  col- 
lection the  same  as  any  other  draft  and  in  due  course  it  is  trans- 
mitted with  the  bill  of  lading  to  New  York.  Thus,  the  seller 
of  the  goods  in  China  has  not  parted  with  his  goods  until  he 
has  obtained  or  made  sure  of  payment  and  the  New  York  mer- 
chant who  has  bought  them  has  not  paid  for  them  (by  use  of 
his  letter  of  credit)  until  the  bill  of  lading  giving  title  to  them 
has  been  surrendered. 

Marie  Theresa  thaler  or  dollar,  A  silver  coin  still  struck 
(minted)  by  Austria,  bearing  the  uniform  date  of  1780  and 
used  in  the  trade  with  the  Levant.  It  is  sometimes  called  the 
Levantine  thaler  or  dollar.     It  is  equal  to  $1.01.31. 

Marine  or  maritime  interest.  Extra  interest  is  charged  be- 
cause of  the  extra  risk  involved  when  money  is  advanced  on 
a  bottomry  bond  (a  mortgage  on  a  vessel). 


300  SMITH'S  FINANCIAL  DICTIONARY. 

Maritime  loan.  A  loan  for  which  a  bottomry  bond  (a  pledge 
of  the  vessel)  or  respondentia  bond  (a  pledge  of  cargo)  is  given 
as  security. 

Mark.  In  dealings  on  the  New  York  Stock  Exchange  four 
reichsmarks  (marks)  is  counted  as  $i.  The  actual  value  of 
four  marks  is  95.2  cents ;  the  quotable  equivalent  of  100  in 
marks,  therefore,  95  1-4.  The  value  of  i  German  mark  is  23.82 
cents. 

The  term  mark  also  is  applied  to  the  X  which  a  person  who 
cannot  write  uses  as  a  signature.  For  additional  information 
see  Signing  by  mark. 

Marked  check.  Many  concerns  have  a  private  mark  which 
they  put  on  their  checks.  This  mark  is  known  to  the  banks 
where  the  concerns  keep  their  accounts  and  its  absence  from 
a  check  is  sufficient  reason  for  withholding  payment  until  the 
concern  by  which  it  purports  to  have  been  drawn  can  be 
communicated  with  to  find  out  whether  the  check  is  genuine. 
The  purpose  of  the  mark  is  to  afiford  protection  against  for- 
gery. 

There  is  one  disadvantage  in  placing  a  private  mark  on  a 
check.  If  a  forger  finds  out  this  mark  and  places  it  on  a  forged 
check  the  check  is  more  likely  to  be  paid  by  the  bank  than  if 
the  mark  were  not  used. 

Marked  transfer.  London  Stock  Exchange  term ;  when  a 
stockholder  has  sold  only  a  portion  of  the  stock  represented 
hy  a  certificate  held  by  him  the  certificate  and  a  transfer  deed 
(assignment)  are  lodged  wnth  the  company,  which  issues  a 
fresh  certificate  to  him  for  the  amount  unsold  and  indorses  the 
transfer  to  the  eff^ect  that  it  is  good  for  the  remaining  amount 
of  stock ;  then,  the  transfer  is  said  to  be  certified  or  marked 
and  the  act  of  certifying   or  marking   is  called  certification. 

Market.  A  market  is  a  place  where  dealings  are  conducted, 
as  dealings  in  stocks   or  in  grain,  cotton    or  coffee,  etc. 

The  expression  "the  market,"  is  commonly  employed  as  a 
general  designation  for  the  business,  whether  on  an  exchange 
or  not,  in  stocks  or  commodities,  as  the  market  is  strong  or 
active   or  weak  or  dull. 

The  lending  of  money  is  not  concentrated  in  one  place ;  it  is 
in  tlic  hands  of  many  persons  with  whom  negotiations  are  con- 
ducted in  person  by  borrowers    or  through  brokers    at  the  in- 


SMITH'S  FINANCIAL  DICTIONARY.  301 

dividual  places  of  business  of  the  lenders,  and  yet  it  is  the 
practise  to  speak  of  the  money  market  as  a  collective  affair. 

On  the  London  Stock  Exchange  the  jobbers  who  deal  in  a 
particular  stock  or  a  particular  group  of  stocks  constitute  the 
market  in  that  stock  or  group  of  stocks ;  likewise,  the  place 
where  they  congregate  is  called  the  market  in  that  stock  or 
group  of  stocks.  Accordingly,  there  are  many  markets  on  the 
London  Stock  Exchange.  The  place  where  American  stocks 
are  dealt  in  is  called  the  American  market;  the  place  where 
South  African  mining  shares  are  dealt  in  is  called  the  Kaffir 
market ;  and  so  on. 

Market  difference.  A  change  in  the  market  price  after  a 
stock  has  been  bought  or  sold  short,  necessitating  the  provid- 
ing of  more  margin  (or  perhaps  permitting  the  withdrawal  of 
margin  in  part    or  in  whole). 

For  information  as  to  deposits  of  margin  required  to  cover 
market  differences  on  time  contracts  in  stocks,  grain,  cotton, 
coffee,  etc.,  see  Mutual  deposits  on  a  contract. 

Marketing.     Selling. 

Market  money.  Aloney  that  is  offering  in  the  market — 
money  that  may  be  borrowed. 

Market  price.     The  actual  current  price. 

On  the  London  Stock  Exchange  the  market  price  of  a  stock 
is  a  double-price — the  price  at  which  a  jobber  (practically  a 
wholesaler  of  stocks)  will  sell  and  the  price  at  which  he  will 
buy,  and  he  will  do  either. 

Market  value.  In  stocks  the  amount  which  a  stock  or  bond 
will  bring  on  an  exchange   or  in  the  open  market. 

Marking  bargains.  London  Stock  Exchange  term ;  jobbers 
or  brokers  on  the  exchange  drop  into  a  box  tickets  containing 
prices  at  which  business  was  done  by  them  between  the  hours 
of  II  a.  m.  and  3  p.  m.  and  this  is  called  marking  bargains. 
These  prices  are  inserted  in  the  Stock  Exchange  Daily  Official 
List  under  the  heading  "Business  done." 

Marking  up  or  marking  down  loans.  Said  when  lenders 
increase  (mark  up)  or  reduce  (mark  down)  the  rates  on  call 
loans.  When  a  call  loan  is  marked  up  the  borrower  renews 
it  at  the  new  rate.  When  a  loan  is  marked  down  it  is  con- 
tinued at  the  new  rate. 

Marking   up   or  marking   down   prices.     A   not   uncommon 


ioi>  SMITH'S  FINANCIAL  DICTIONARY. 

method  of  manipulating  a  stock  is  by  washing,  which  consists 
in  buying  and  selling  the  stock  at  the  same  time.  The  specu- 
lator who  seeks  to  advance  a  stock  in  price  by  manipulation 
gives  to  one  broker  an  order  to  bid  it  up  on  a  scale  (that  is, 
after  each  transaction  in  the  stock  to  ofifer  to  buy  a  certain 
amount  of  the  stock  at,  say,  i-8  of  i  per  cent  above  the  last 
price).  To  another  broker  the  speculator  gives  an  order  to 
simultaneously  sell  the  same  amount  of  the  stock  at  the  ad- 
vancing prices.  Thus,  the  speculator  raises  the  price  of  the 
stock  without  actually  acquiring  any  stock.  If  the  speculator 
seeks  to  depress  a  stock  in  price  the  method  pursued  is  the 
same.  To  one  broker  is  given  an  order  to  offer  the  stock  down 
(that  is,  after  each  transaction  in  the  stock  to  offer  to  sell  it 
at,  say,  i-8  per  cent  below  the  last  price).  To  another  broker 
is  given  an  order  to  buy  the  stock.  These  oft'setting  buying 
and  selling  orders  which  result  in  no  accumulation  of  stock 
are  known  as  wash  or  matched  orders ;  and  the  process  of  ad- 
vancing (or  depressing)  prices  by  wash  or  matched  orders  is 
known  as  marking  up  (or  marking  down)  prices. 

MAT.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  matured,  as  matured  bonds  (bonds  the  principal 
of  which  is  due  and  interest  on  which  has  ceased). 

Matched  order.  A  Wall  Street  term,  meaning  an  order  to 
buy  and  sell  the  same  stock ;  such  an  order  is  employed  for  the 
purpose  of  artificially  raising  or  lowering  the  price. 

Matthew  Marshall.  Prior  to  January  i,  1855,  the  Bank  of 
England  notes  bore  a  promise  to  "pay  ^Matthew  Marshall  or 
bearer" ;  since  that  date  the  notes  have  borne  a  promise  to 
"pay  to  bearer  on  demand." 

Matured.  As  applied  to  an  obligation  matured  means  that 
the  obligation  has  become  due  and  is  payable.  When  a  bond 
has  matured  the  principal  is  due  and  interest  on  it  ceases. 

Maturity.  The  time  fixed  for  the  payment  of  a  promissory 
note  or  of  a  bill  (draft).  The  term  is  used  particularly  with 
reference  to  foreign  bills  of  exchange.  When  it  is  said  that 
maturities  in  a  certain  month  are  large  it  is  meant  that  a  large 
number  of  bills  mature  or  fall  due  in  that  month. 

An  obligation  is  said  to  have  reached  maturity  when  it  has 
become  due  and  payable. 

Maundy  money.      Silver   fonrpenny.  threepenny,   twopenny 


SMITH'S  FINANCIAL  DICTIONARY.  303 

and  penny  pieces  specially  struck  (minted)  each  year  in  Great 
Britain  for  distribution  as  alms  by  the  sovereign  on  Maundy 
Thursday — the  day  before  Good  Friday.     These  coins  never 
pass  into  circulation    but  are  gathered  up  by  numismatists. 
Melon.     See  Cutting  a  melon. 

Memorandum.  A  brief  written  summary  or  outline  of  the 
terms  of  a  transaction. 

Also  see  On  memorandum. 

Memorandum  check.  When  a  bank  sends  through  the  clear- 
ing house  a  check  payable  by  another  bank  and  it  is  rejected 
by  that  bank  because  there  are  no  funds  on  deposit  with 
Avhich  to  meet  it  or  for  some  other  reason  the  second  bank 
returns  it  by  messenger  to  the  first  bank.  The  first  bank  hav- 
ing been  credited  with  it  and  the  second  bank  having  been 
debited  with  it  at  the  clearing  house  the  first  bank  must  pay 
the  amount  of  it  to  the  second  bank.  It  accordingly  delivers 
the  amount  of  it  in  money  to  the  second  bank's  messenger  if 
the  check  is  small ;  if  the  amount  is  large  it  issues  to  the 
second  bank  a  memorandum  check  which  the  second  bank 
sends  through  the  clearing  house  the  next  day  for  collection. 

Memorandum  of  association.  London  term  used  in  connec- 
tion with  the  incorporation  of  companies ;  it  means  the  charter 
of  the  company,  which  defines  its  powers  and  states  its  objects. 
The  Secretary's  Manual  on  the  Law  and  Practice  of  Joint- 
Stock  Companies  quotes  a  statement  by  Lord  Justice  Bowen 
which  thus  distinguishes  the  Memorandum  and  Articles  of 
Association :  "The  Memorandum  contains  the  fundamental 
conditions  upon  which  alone  the  company  is  allowed  to  be  in- 
corporated. They  are  conditions  introduced  for  the  benefit  of 
the  creditors  and  the  outside  public  as  well  as  shareholders. 
The  Articles  are  the  internal  regulations  of  the  company." 

Mercantile.  Pertaining  to  the  business  of  buying  and  sell- 
ing merchandise;  commercial. 

Mercantile  account.  A  statement  of  transactions  between 
a  merchant  and  his  customer. 

Mercantile  agency.  Same  as  commercial  agency  ;  a  concern 
which  with  the  cooperation  of  merchants,  manufacturers, 
bankers  and  others  ascertains,  records  and  makes  known  to 
its  patrons   or  subscribers  the  financial  standing,  general  busi- 


304  SMITH'S  FINANCIAL  DICTIONARY. 

ness  reputation  and  credit  ratings  of  individuals,  firms  and 
corporations  engaged  in  mercantile  and  industrial  enterprises. 
In  addition  it  compiles  reports  on  the  state  of  trade  and 
on  commercial  and  financial  operations  generally,  including 
records  of  failures,  judgments,  etc. 

Mercantile  law.  The  law  of  commercial  contracts  and  the 
usages  or  customs  of  business. 

Mercantile  paper.  Promissory  notes  given  by  merchants 
for  merchandise  purchased  or  drafts  drawn  against  purchas- 
ers of  merchandise.  The  term  commercial  paper  includes  mer- 
cantile paper.  For  complete  information  see  Commercial 
paper. 

Merchandise.  Anything  movable  that  is  customarily  bought 
and  sold  for  profit. 

Merchandise  note.  A  promissory  note  issued  in  payment 
for  merchandise. 

Merchandising.  Mercantile  business ;  buying  and  selling 
goods. 

Merchant  bar.  Iron  in  the  common  bar  form  convenient  for 
the  market. 

Merger  company.  A  company  formed  for  the  purpose  of 
acquiring  other  companies — that  is,  it  issues  its  own  stock  in 
exchange  for  the  stocks  of  other  companies  and  thus  merges 
the  other  companies  in  itself. 

Metallic  standard.  Exists  when  the  basis  of  value  is  gold 
or  silver,  or  gold  and  silver  together  at  an  established  ratio. 

For  additional  information  see  Monetary  standard. 

Metric  ton.  One-thousand  kilograms,  or  2,204.6  pounds. 
A  gross  or  long  ton  is  2,240  pounds ;  a  short  ton  is  2,000 
pounds. 

Mexican  dollar.  The  actual  name  is  peso.  Its  weight  is 
417.8  grains  .902.7  fine.  At  the  coining  rate  of  the  United 
States  silver  dollar  it  is  worth  $1.01.59;  its  nominal  or  osten- 
sible value  in  gold  is  98.39  cents.  Its  actual  value  outside  of 
Mexico  depends  on  the  commercial  (market)  price  of  silver. 

Middleman.  One  who  conducts  negotiations  between  sell- 
er and  buyer ;  also,  one  who  buys  in  bulk  and  sells  in  smaller 
lots ;  a  jobber. 

Middle  price.     London  Stock  Exchange  term,  meaning  the 


SMITH'S  FINANCIAL  DICTIONARY.  305 

price  midway  between  the  price  at  which  a  jobber  (dealer) 
will  sell  and  the  price  at  which  he  will  buy.  Tims,  in  a  ciuota- 
tion  993-4 — 100  1-4  the  middle  price  is  100. 

Mileage.     Means  length  or  distance  in  miles. 

The  road  mileage  of  a  railroad  is  the  length  in  miles  of  the 
railroad  itself. 

Track  mileage  is  the  length  in  miles  of  the  tracks  of  the 
railroad,  eac-h  mile  of  double  track  being  counted  as  two  miles ; 
side  tracks  and  switching  tracks  also  being  counted  and  in- 
cluded in  the  mileage.  Track  miles  means  the  same  as  track 
mileage. 

Train  mileage  is  the  number  of  miles  traversed  by  a  particu- 
lar train ;  or  the  number  of  miles,  collectively,  traversed  by  all 
trains  of  a  railroad.  The  result  attained  by  adding  together 
the  number  of  miles  traversed  by  all  trains  and  dividing  by  the 
number  of  trains  shows  the  average  number  of  miles  traversed 
by  each  train.     Train  miles  means  the  same  as  train  mileage. 

Car  mileage  is  the  number  of  miles  traversed  by  a  particular 
car;  or,  again,  it  is  the  number  of  miles,  collectively,  trav- 
ersed by  all  cars.  The  result  attained  by  adding  together  the 
number  of  miles  traversed  by  all  cars  and  dividing  by  the 
number  of  cars  shows  the  average  number  of  miles  traversed 
by  each  car.     Car  miles  means  the  same  as  car  mileage. 

Ton  mileage  is  the  number  of  miles  the  whole  number  of 
tons  was  hauled.  The  average  number  of  miles  each  ton  was 
hauled  (transported)  is  ascertained  by  adding  together  the 
number  of  miles  each  ton  was  hauled  and  then  dividing  by  the 
number  of  tons.     Ton  miles  means  the  same  as  ton  mileage. 

Passenger  mileage  means  the  number  of  miles,  collectively, 
traveled  by  all  passengers.  The  number  of  miles  traveled 
by  all  passengers  divided  by  the  number  of  passengers  shows 
the  average  number  of  miles  traveled  by  each  passenger.  Pas- 
senger miles  means  the  same  as  passenger  mileage. 

Milking.  In  Wall  Street  parlance  milking  the  street  or  milk- 
ing the  market  is  the  manipulation  of  stocks  by  a  clique  for 
their  profit  and  to  the  loss  of  others  to  whom  they  sell  or  from 
whom  they  buy.  Milking  the  public  is  the  manipulation  of 
stocks  by  a  clique  for  their  profit  and  to  the  loss  of  the  public. 

Mille.  One  thousand.  Therefore,  per  mille  means  per 
thousand.     A  premium  of  i  per  mille  is  i  on  1,000,  which  is 


3o6  SMITH'S  FINANCIAL  DICTIONARY. 


equal  to  i-io  of  i  per  cent.  For  instance,  if  the  Bank  of  France 
charges  a  premium  of  i  per  mille  for  gold  the  premium  is  I 
franc  on  every  i,ooo  francs  of  gold. 

Milling.  The  name  applied  to  the  corrugated  edge  of  gold 
and  silver  coins  which  was  devised  to  prevent  the  reduction  of 
coins  by  cutting  ofif  the  rims. 

Mining  stocks.  These  stocks  are  usually  quoted  in  dollars 
and  cents  instead  of  in  percentages. 

Minor  coins.  Five-cent  nickel — weight,  77.16  grains,  75 
per  cent  copper  and  25  per  cent  nickel ;  thickness,  .062  inch ; 
diameter,  .8  inch.  One  cent  bronze — weight,  48  grains,  95  per 
cent  copper  and  5  per  cent  tin  and  zinc ;  thickness,  .043  inch ; 
diameter,  .75  inch. 

Minor  coins  are  issued  according  to  the  needs  of  the  coun- 
try and  are  redeemable  at  the  Treasury  in  sums  of  $20  and 
multiples  thereof. 

Mint.  A  place  where  the  coin  of  a  country  is  coined  (man- 
ufactured) and  from  which  it  is  issued  by  governmental  au- 
thority. 

Mintage.  The  duty  or  charge  paid  for  coining;  also,  the 
seigniorage  or  profit  in  coining. 

Mint  check.  A  check  on  the  United  States  Treasury  drawn 
bv  a  mint  and  given  in  payment  for  gold  deposited  in  the  mint. 
Mint-mark.  A  private  mark  of  a  mint  placed  on  coins  to 
identify  the  place  of  manufacture.  Coins  minted  in  the  Phil- 
adelphia mint  bear  no  special  mark.  Those  minted  at  Carson 
City,  Nev.,  are  marked  C.C. ;  those  at  Dahlonega,  Ga.,  D. ;  those 
at  New  Orleans,  O. ;  those  at  San  Francisco,  S. 

Mint-master.  The  master  or  superintendent  of  a  mint. 
Mint  par.  The  equivalent  unit  (monetary  unit)  of  one 
country  expressed  in  the  terms  of  the  currency  of  another 
country  which  uses  the  same  metal  as  a  standard  of  value. 
Thus,  $1  in  United  States  gold  money  is  4.1 1  shillings  or  4 
shillings  i  1-3  pence  in  English  gold  money,  or  5  francs  18  cen- 
times in  French  gold  money,  or  4  reichsmarks  (marks)  20 
pfennigs  in  German  gold  money,  or  2  guilders  (florins)  49 
cents  in  Netherlands  (Holland)  gold  money,  and  so  on. 

Mint  remedy.     Same  as  tolerance ;  the  extent  to  which  coins 
may  be  abraded  (reduced  in  weight  by  abrasion)  or  otherwise 


SMITH'S  FINANCIAL  DICTIONARY. 307 

worn  and  still  be  redeemable  at  the  Treasury  at  their  face 
value. 

The  law  says  that  any  gold  coins  of  the  United  States  re- 
duced in  weight  by  natural  abrasion  not  more  than  1-2  of  i  per 
cent  after  a  circulation  of  twenty  years,  as  shown  by  the  date 
of  coinage,  and  at  a  ratable  proportion  for  any  period  less  than 
twenty  years,  shall  be  received  at  their  nominal  value  by  the 
United  States  Treasury. 

The  tolerance  on  silver  and  base-metal  coins  is  unlimited ; 
the  Treasury  will  receive  them  at  their  face  value  until  abra- 
sion   or  wear    has  obliterated  the  inscriptions  on  them. 

The  term  mint  remedy  or  tolerance  also  applies  to  the  al- 
lowance for  a  slight  difference  in  the  fineness  of  gold  or  silver 
from  the  government  standard.  '  In  gold  the  limit  of  difiference 
above  or  below  is  one-thousandth  ;  in  silver  it  is  three-thous- 
andths. 

Mutilated  coins,  either  gold,  silver,  nickel  or  bronze,  are 
worth  only  their  bullion  value,  or  in  other  words,  are  Avorth 
only  the  commercial  value  of  the  metal  of  which  they  are  com- 
posed. 

Mint  tie.  The  equivalent  of  the  metallic  money  of  one  coun- 
try in  that  of  another  country ;  mint  par ;  for  additional  infor- 
mation see  Mint  par. 

Minute  book,  A  book  in  w^hich  are  kept  the  details  of  the 
proceedings  at  meetings  of  the  stockholders  or  the  board  of 
directors  of  a  stock  company  or  of  a  committee  of  the  board  of 
directors. 

Miscellaneous  assets.     Assets  of  various  kinds. 

Miscellaneous  securities.  Those  issued  by  corporations 
which,  unlike  railroad  companies  and  industrial  (manufactur- 
ing) companies,  have  no  special  classification. 

Mississippi  Company.  In  1718  John  Law,  a  financial  ad- 
venturer, the  son  of  a  goldsmith  in  Edinburgh,  Scotland, 
created  in  Paris,  with  the  consent  and  concurrence  of  the 
regent  of  France  (Due  D'Orleans),  the  Company  of  the  West, 
to  which  was  granted  the  vast  territory  in  the  valley  of  the 
Mississippi  in  North  America  which  bore  the  name  of  Louis- 
iana. In  this  company  also  were  vested  the  privileges  and 
possessions  of  all  foreign  trading  companies,  the  control  of  the 
French   mint,  the  handling  of  the  king's  revenues    and  the 


3oS  SMITH'S  FINANCIAL  DICTIONARY. 

management  of  the  Royal  Bank.  Subsequently  the  com- 
pany assumed  the  title  of  Company  of  the  Indies  on  its  ac- 
quisition of  the  exclusive  rights  of  the  East  India  Company 
in  addition  to  its  other  prerogatives.  The  company  was  al- 
ways commonly  known  as  the  Mississippi  Company;  it  de- 
rived this  name  from  the  fact  that  through  the  province  of 
Louisiana  which  was  granted  to  it  flowed  the  great  Missis- 
sippi River. 

A  wild  speculation  took  place  in  the  stock  of  the  company. 
The  shares,  which  were  of  the  par  or  face  value  of  500  livres 
(about  $100)  each,  sold  in  September,  1719,  as  high  as  10,000 
livres  (about  $2,000)  each.  In  the  middle  of  the  following 
year  the  whole  scheme  collapsed  and  John  Law,  who  held  the 
office  of  Comptroller  General  of  the  Finances  of  the  Empire, 
fled  from  France. 

Mistake.  When  personal  property  (as  stocks,  or  bonds)  is 
by  mistake  offered  for  sale  at  a  lower  price  than  was  intend- 
ed and  the  offer  is  accepted  by  one  who  knows  or  has  good 
reason  to  believe  that  it  was  a  mistake  the  sale  is  not  binding 
upon  the  seller. 

Mixed  loan.  A  loan  secured  by  collateral  of  different  char- 
acter, as  railroad  and  industrial  stocks,  instead  of  railroad 
stocks  alone    or  industrial  stocks  alone. 

ML.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  main  line,  as  main  line  bonds. 

M/m.     Made  merchantable. 

Mock  auction.  Said  when  the  auctioneer  employs  con- 
federates to  bid  against  genuine  bidders  so. as  to  raise  prices. 

Monetary.  Pertaining  to  money  or  finance ;  consisting  of 
money;  financial;  pecuniary;  as  monetary  convention,  mone- 
tary union,  etc. 

Monetary  events.  Following  is  a  summary  of  monetary 
events  of  the  world,  beginning  with  1786.  as  compiled  by  the 
Bureau  of  the  Mint  in  the  Treasury  Department  of  the  Unit- 
ed States : 

1786. — Establishment  of  the  double  standard  in  the  United  States  with 
a  ratio  of  i  to  15.25;  that  is,  on  the  basis  of  123.134  grains  of  fine  gold  for 
the  half-eagle  or  $5  piece,  and  375.64  grains  of  fine  silver  for  the  dollar, 
without  any  actual  coinage. 

1792. — Adoption  of  the  ratio  of  i  to  15  and  establishment  of  a  mint 


SMITH'S  FINANCIAL  DICTIONARY.  309 

with  free  and  gratuitous  coinage  in  the  United  States ;  the  silver  dollar 
equal  to  371 J4  grains  fine,  the  eagle  to  247I/2  grains  fine. 

1803. — Establishment  of  the  double  standard  in  France  on  the  basis  of 
the  ratio  of  i  to  isYi,  notwithstanding  the  fact  that  the  market  ratio  was 
then  about  i  to  15. 

1810. — Introduction  of  the  silver  standard  in  Russia  on  the  basis  of  the 
ruble  of  17.99  grains  of  fine  silver,  followed  in  1871  by  the  coinage  of  im- 
perials or  gold  pieces  of  5  rubles,  of  5.998  grams,  therefore  with  a  ratio  of 
I  to  15.  This  ratio  was  changed  by  the  increase  of  the  imperial  to  5  rubles 
15  copecks,  and  later  to  i  to  15.45. 

1815. — Great  depreciation  of  paper  money  in  England,  reaching  26^ 
per  cent  in  May.  Course  of  gold,  £5  6s.,  and  of  silver  71  Hd.  per  ounce 
standard.  In  December  the  loss  was  only  6  per  cent.  Gold  at  this  period 
was  quoted  at  £4  3s.,  and  silver  at  64d. 

1816. — Abolition  of  the  double  standard  in  England,  which  had  had  as 
its  basis  the  ratio  of  i  to  15.21,  and  adoption  of  the  gold  standard  on  the 
basis  of  the  pound  sterling  at  7.322  grams  fine  in  weight.  Coinage  of 
divisional  money  at  the  rate  of  66d.  per  ounce.  Extreme  prices  £4  2S. 
for  gold  and  64d.  for  silver  in  January;  £3  i8s.  6d.  and  59/4 d.  in  December. 

1816. — Substitution  for  the  ratio  of  i  to  15.5  in  Holland,  established 
by  a  rather  confused  coinage,  of  the  ratio  of  i  to  15;^^. 

1819. — Abolition  of  forced  currency  in  England.  Price  of  gold  £3 
17s.  \0y2A.  and  of  silver  62d.  per  ounce  in  October,  against  £4  is.  6d.  and 
67d.  in  February. 

Note. — The  price  of  silver  given  hereafter  represents  the  average  rate 
per  ounce  standard — that  is,  the  mean  between  the  highest  and  the  lowest 
price  quoted  during  the  year. 

1832. — Introduction  of  the  monetary  system  of  France  in  Belgium  with 
a  decree  providing  for  the  coinage  of  pieces  of  20  and  40  francs,  which, 
however,  were  not  stamped.     Silver,  59-)4d. 

1834. — Substitution  of  the  ratio  of  i  to  16  for  that  of  i  to  15  in  the 
United  States  by  reducing  the  weight  of  the  eagle,  $10  gold  piece,  from  270 
grains  to  258  grains. 

1835. — Introduction  of  the  company  rupee,  a  piece  of  silver  weighing 
165  grains  fine,  in  India,  in  place  of  the  sicca  rupee.  Creation  of  a  trade 
coin — the  mohur,  or  piece  of  15  rupees — containing  165  grains  of  fine  gold. 
Silver,  59  ii-i6d. 

1837. — Fineness  of  United  States  gold  coins  raised  from  0.899225  to  0.900, 
and  silver  coins  from  0.8924  to  0.900,  giving  a  ratio  of  i  to  15.088  and 
fixing  the  standard  weight  of  the  silver  dollar  at  4i2j/^  grains.  Silver, 
59  i5-i6d. 

1844. — Introduction  of  the  double  standard  in  Turkey,  with  the 
ratio  of  i  to  15.10.     Silver,  59^2^. 

1847. — Abolition  of  the  double  standard  in  Holland  by  the  introduc- 
tion of  the  silver  standard  on  the  basis  of  a  i-fiorin  piece,  0.945  gram  fine 
the  coinage  of  which  had  already  been  decreed  in  1839.     Silver  59  ii-i6d. 

1848. — Discovery  of  the  gold  mines  of  California. 


Sw  SMITH'S  FINANCIAL  DICTIONARY. 

1848. — Coinage  in  Belgium  of  pieces  of  10  and  25  francs  in  gold,  a 
shade  too  light.  These  pieces  were  demonetized  and  withdrawn  from 
circulation  in  1884.     Silver,  59>^d. 

1848. — Replacing  the  ratio  of  i  to  16  in  Spain,  which  had  been  in  force 
since  1786,  by  that  of  i  to  15.77- 

1850. — Introduction  of  the  French  monetary  system  in  Switzerland, 
without  any  actual  coinage  of  gold  pieces.     Silver,  60  i-i6d. 

1851. — Discovery  of  the  gold  mines  of  Australia. 

1853.— Lowering  of  the  weight  of  silver  pieces  of  less  value  than  $1  to 
the  extent  of  7  per  cent  in  the  United  States  and  limitations  of  their  legal- 
tender  power  to  $5.     Silver,  6iJ^d. 

1853. — Maximum  of  the  production  of  gold  reached  in  California  when 
it  amounted  to  $65,000,000. 

1854. — Introduction  of  the  gold  standard  in  Portugal  on  the  basis  of 
the  crown  of  16.257  grams  fine.  Before  this  period  the  country  had  the 
silver  standard,  with  a  rather  large  circulation  of  gold  coins  stamped  on 
the  basis  of  i  to  15^  in  1835  and  i  to  16H  in  1847.     Silver,  61  ^d. 

1854. — Modification  of  the  ratio  of  i  to  15.77  i"  Spain  by  raising  it  to 
I  to  15.48,  and  by  lowering  the  piaster  from  23.49  grams  to  23.36  grams  fine. 

1854. — Introduction  of  the  silver  standard  as  it  existed  in  the  mother 
country,  in  Java,  in  place  of  the  ideal  Javanese  money  and  coinage  of 
colonial  silver  pieces. 

1857. — Conclusion  of  a  monetary  treaty  between  Austria  and  the  Ger- 
man states,  in  accordance  with  which  i  pound  of  fine  silver  (one-half  a 
kilogram)  was  stamped  into  30  thalers  or  52^^  florins  of  south  Germany, 
or  45  Austrian  florins,  resulting  in  I  thaler  equaling  1%  German  florins  or 
i>4  Austrian  florins.     Silver,  6i54d. 

1861. — Law  decreeing  the  coinage  of  gold  pieces  of  10  and  20  francs 
exactly  equal  to  French  coins  of  the  same  denomination  in  Belgium.  Sil- 
ver, 6i54d. 

1862. — Adoption  of  the  French  monetary  system  by  Italy.  Silver, 
61  7-i6d. 

1865.— Formation  of  the  Latin  Union  between  France,  Belgium,  Switz- 
erland, and  Italy  on  the  basis  of  a  ratio  of  i  to  15^.     Silver,  61  i-i6d. 

1867. — First  international  'monetary  conference  held  in  Paris. 

1868. — Adoption  of  the  French  monetary  system  by  Roumania,  with  the 
exclusion  of  the  5-franc  silver  piece,  which  was,  however,  stamped  in  1881 
and  1883.     Silver,  6oi4d. 

1868. — Admission  of  Greece  into  the  Latin  Union.  The  definite  and 
universal  introduction  of  the  French  monetary  system  into  the  country  was 
effected  only  in  1883. 

1868. — Adoption  of  the  French  monetary  system,  with  the  peseta  or 
franc  as  the  unit,  by  Spain.  The  coinage  of  alphonses  d'or  of  25  pesetas 
was  made  only  in  1876. 

1871. — Replacing  of  the  silver  standard  in  Germany  by  the  gold  stand- 
ard. Coinage  in  1873  of  gold  pieces  of  5,  10,  and  20  mark  pieces,  the  latter 
weighing  7.168  grams  fine.     Silver,  6oi/^d. 


SMITH'S  FINANCIAL  DICTIONARY.  3" 

1871. — Establishment  of  the  double  standard  in  Japan  with  the  ratio  of 
I  to  16.17  by  the  coinage  of  the  gold  yen  of  1.667  grams  and  of  the  silver 
yen  of  26.956  grams,  both  with  a  fineness  of  0.900. 

1873. — Increase  of  the  intrinsic  value  of  the  subsidiary  coins  of  the 
United  States.  Replacing  of  the  double  standard  by  the  gold  standard. 
Reduction  of  the  cost  of  coinage  of  gold  to  one-fifth  per  cent,  the  total 
abolition  of  which  charge  was  decreed  in  1875.  Creation  of  a  trade  dollar 
of  420  grains  with  a  fineness  of  0.900.     Silver,  59^ d. 

1873. — Suspension  of  the  coinage  of  5-franc  pieces  in  Belgium. 

1873. — Limitation  of  the  coinage  of  5  francs  on  individual  account  in 
France. 

1873. — Suspension  of  the  coinage  of  silver  in  Holland. 

1873. — Formation  of  the  Scandinavian  Monetary  Union.  Replacing  of 
the  silver  standard  in  Denmark,  Sweden,  and  Norway  by  that  of  gold  on 
the  basis  of  the  krone.  Coinage  of  pieces  of  10  and  20  kroner,  the  latter 
weighing  8.961  grams,  with  a  fineness  of  0.900. 

1874. — Introduction  of  the  system  of  contingents  for  the  coinage  of 
S-franc  silver  pieces  in  the  Latin  Union.     Silver,  58  5-i6d. 

1875. — Suspension  of  the  coinage  of  silver  on  individual  account  in 
Italy.     Silver,  56^'^d. 

1875. — Suspension  of  the  coinage  of  silver  on  account  of  the  Dutch 
colonies. 

1875. — Introduction  of  the  double  standard  in  Holland  on  the  basis  of 
the  ratio  of  i  to  15.62  by  the  creation  of  a  gold  piece  of  10  florins,  weigh- 
ing 5.048  grams  fine,  with  the  maintenance  of  the  suspension  of  the  coinage 
of  silver. 

1876. — Great  fluctuations  in  the  price  of  silver,  which  declined  to  46^^-, 
representing  the  ratio  of  i  to  20.172,  in  July.  Recovery,  in  December,  to 
58j/^d.     Average  price,  52^d. 

1877. — Coinage  of  5-franc  silver  pieces  by  Spain  continued  later,  not- 
withstanding the  decline  of  silver  in  the  market.     Silver,  54Md. 

1877. — Replacing  of  the  double  standard  in  Finland  by  that  of  gold  on 
the  basis  of  the  mark  or  franc. 

1878.— Act  of  United  States  Congress  providing  for  the  purchase,  from 
time  to  time,  of  silver  bullion,  at  the  market  price  thereof,  of  not  less  than 
$2,000,000  worth  per  month  as  a  minimum,  nor  more  than  $4,000,000  worth 
per  month  as  a  maximum,  and  its  coinage  as  fast  as  purchased  into  silver 
dollars  of  412^  grains.  The  coinage  of  silver  on  private  account  pro- 
hibited.    Silver,  52  9-i6d. 

1878. — Meeting  of  the  second  international  monetary  conference  in 
Paris.     Prolongation  of  the  Latin  Union  to  January  i,   1886. 

1879. — Suspension  of  the  sales  of  silver  by  Germany.     Silver,  5i%d. 

J 879. — Resumption  of  specie  payment  by  the  United  States. 

1881. — Third  international  monetary  conference  in  Paris.  Silver, 
51  ii-i6d. 

1885. — Introduction  of  the  double  standard  in  Egypt.     Silver,  48^d. 
1885. — Prolongation  of  the  Latin  Union  to  January  i,  1891. 


312  SMITH'S  FINANCIAL  DICTIONARY. 

1886. — Great  decline  in  the  price  of  silver,  which  fell  in  August  to  42d., 
representing  a  ratio  of  i  to  22.5,  and  recovery,  in  December,  to  46d.  Modi- 
fication of  the  coinage  of  gold  and  silver  pieces  in  Russia.     Silver,  45j^d. 

1887. — Retirement  of  the  trade  dollars  by  the  Government  of  the 
United  States  in  February.  Demonetization  of  the  Spanish  piasters, 
known  as  Ferdinand  Carolus,  whose  reimbursement  at  the  rate  of  5  pesetas 
ended  on  March  11.  New  decline  of  silver  in  March  to  44d.,  representing 
the  ratio  of  i  to  21.43.     Silver,  44^d. 

1890. — United  States — Repeal  of  the  act  of  February  28,  1878,  com- 
monly known  as  the  Bland-Allison  law,  and  substitution  of  authority 
for  purchase  of  4,500,000  fine  ounces  of  silver  each  month,  to  be  paid 
for  by  issue  of  Treasury  notes  payable  in  coin.  (Act  of  July  14,  1890). 
Demonetization  of  25,000,000  lei  in  pieces  of  5  lei  in  Roumania  in  con- 
sequence of  the  introduction  of  the  gold  standard  by  the  law  of  Octo- 
ber 27.     Silver,  47  Ii-i6d. 

1891. — Introduction  of  the  French  monetary  system  in  Tunis  on  the 
basis  of  the  gold  standard.  Coinage  of  national  gold  coins  and  billon. 
Silver,  45  i-i6d. 

1892. — Replacing  of  the  silver  standard  in  Austria-Hungary  by  that  of 
gold  by  the  law  of  August  2.  Coinage  of  pieces  of  20  crowns,  containing 
6.098  grams  fine.  The  crown  equals  one-half  florin.  Meeting  of  the  fourth 
international  monetary  conference  at  Brussels.  Production  of  gold  reaches 
its  maximum,  varying  between  675,000,000  and  734,000,000  francs.  Silver, 
39  i3-i6d. 

1893. — Suspension  of  the  coinage  of  silver  in  British  India  and  of 
French  trade  dollars  on  individual  account.  Panic  in  the  silver  market  in 
July  in  London,  when  the  price  fell  to  30i/2d.,  representing  the  ratio  of  i  to 
30.92.  Repeal  of  the  purchasing  clause  of  the  act  of  July  15.  1890,  by  the 
Congress  of  the  United  States. 

1895. — Adoption  of  the  gold  standard  by  Chile. 

1895. — Russia  decides  to  coin  100,000,000  gold  rubles  in  1896. 

1896. — Costa  Rica  adopts  the  gold  standard. 

1896. — Russia  decides  to  resume  specie  payments. 

1897.— Adoption  of  the  gold  standard  by  Russia  and  Japan. 

1897. — Peru  suspends  the  coinage  of  silver  and  prohibits  its  importa- 
tion. 

i8g8. — Ecuador  limited  the  tender  of  silver  coins  to  the  amount  of  10 

sucres. 

1899. — India  adopted  the  gold  standard  at  the  rate  of  15  rupees  to  I 
pound  sterling  (British  standard). 

1900. — United  States  adopted  the  gold  standard. 

Monetary  standard.  The  standard  of  value  established  by 
law  as  the  basis  for  the  money  of  a  country. 

By  a  long  process  of  evolution  or  natural  selection  gold 
and  silver  have  been  left  in  possession  of  the  field  to  the  ex- 
clusion of  everything  else   and  now  all  the  monetary  systems 


SMITH'S  FINANCIAL  DICTIONARY.  313 


of  the  world  are  based  on  one  or  the  other  or  both  together. 
Gold,  however,  is  rapidly  becoming  the  universal  standard 
in  law  as  it  has  been  in  fact  for  many  years. 

Great  Britain  first  adopted  the  gold  standard  (1816),  One 
by  one  the  nations  have  fallen  into  line,  the  United  States  as 
recently  as  1900,  leaving  the  Latin  Union  as  the  most  im- 
portant representative  of  the  double  standard  system,  while 
the  use  of  silver  as  the  standard  is  practically  confined  to  the 
Far  East  and  to  Mexico  and  some  parts  of  Central  and  South 
America. 

The  bimetallic  system  in  its  unrestricted  form  has  proved 
a  failure  owing  to  the  wide  variation  in  value  between  gold 
and  silver  and  no  nation  any  longer  undertakes  to  coin  both 
gold  and  silver  in  unlimited  quantities.  The  countries  which 
still  retain  nominally  the  double  standard  place  severe  restric- 
tions on  the  use  of  silver  and  mint  it  only  on  government  ac- 
count, while  gold  is  coined  as  freely  as  it  is  offered. 

Thus,  gold  has  become  practically  the  standard  of  the 
world,  for  not  only  do  the  double  standard  countries  restrict 
the  use  of  silver  for  the  purpose  of  keeping  their  silver  money 
at  a  parity  with  gold,  but  the  silver  standard  countries  in  all 
international  transactions  are  forced  to  use  gold  as  the  basis 
of  exchange. 

The  value  of  a  gold  coin  depends  on  the  amount  of  pure 
gold  it  contains;  therefore,  governments  in  establishing  their 
monetary  standard  and  monetary  unit  declare  by  law  the 
weight  and  quality  of  the  coin  in  which  values  are  to  be  meas- 
ured. Thus,  in  the  United  States,  where  gold  is  the  standard 
and  the  dollar  the  unit,  it  is  enacted  that  a  gold  dollar  shall 
contain  23.2  grains  of  pure  gold  and  2.6  grains  of  alloy,  mak- 
ing the  weight  of  the  dollar  25.8  grains  of  standard  gold — gold 
.900  fine.  In  Great  Britain  the  unit  is  the  sovereign  or  pound 
sterling  and  contains  113  grains  of  pure  gold  and  10.27  grains 
of  alloy,  making  the  standard  of  fineness  .916  2-3  instead  of 
.900  as  in  the  United  States  and  most  other  gold-using  coun- 
tries. 

For  additional  information  see  Moneys  of  the  world. 

Monetary  unit.  The  unit  of  measure  of  the  value  of  the 
money  of  a  country.  The  gold  dollar  is  the  monetary  unit 
of  the  United  States ;  the  pound  sterling  in  gold  is  the  mone- 


314  SMITH'S  FINANCIAL  DICTIONARY. 

tary  unit  of  Great  Britain.     Also  see  Monetary  standard ;  al- 
so see  Moneys  of  the  world. 

Money.  A  standard  of  value  and  medium  of  payment  es- 
tablished by  law. 

In  the  United  States  the  term  money  means  gold,  silver, 
nickel  and  bronze  coins,  gold  certificates,  silver  certificates, 
Treasury  notes  (issued  for  the  purchase  of  silver  bullion  un- 
der the  so-called  Sherman  act).  United  States  notes  (green- 
backs) and  National  bank  notes  (issued  by  national  banks). 
Other  synonymous  terms  are  cash    and  currency. 

The  most  important  attribute  of  any  form  of  money  is  its 
legal  tender  power,  by  which  is  meant  the  power  conferred  by 
law  to  discharge  a  debt  payable  in  money.  Gold  alone  pos- 
sesses by  virtue  of  commercial  usage  the  unlimited  legal 
tender  quality  throughout  the  civilized  world.  The  value, 
that  is,  the  purchasing  power,  of  gold  is  the  same  throughout 
the  world. 

Money  must  be  something  the  worth  of  which  all  persons 
concerned  ip  its  use  recognize.  Hence,  it  must  be  a  commod- 
ity which  there  is  a  common  desire  to  obtain. 

The  use  of  gold  and  silver  as  money  is  as  old  as  history, 
but  cattle,  tobacco,  animals,  skins,  iron,  wheat,  rice,  beads — 
in  fact,  nearly  everything  which  people  want  and  recognize 
the  value  of  by  general  consensus  of  opinion  has  been  used 
for  the  purpose.  As  civilization  has  grown  and  trading  has 
become  complicated  everything  but  gold  and  silver  has  grad- 
ually dropped  into  disuse  because  gold  and  silver  are  more 
convenient. 

So,  also,  as  between  gold  and  silver  gold  has  gradually 
come  to  be  the  metal  which  all  peoples  agree  upon  and  ac- 
cept as  the  measure  of  value  for  other  things,  for  even  in  sil- 
ver-using countries  all  dealings  with  the  outside  world  are 
based  on  gold  valuations. 

Originally,  gold  and  silver  passed  according  to  weight  and 
fineness,  but  the  inconvenience  of  constant  weighing  and  test- 
ing led  to  the  device  of  stamping  a  certification  of  weight  and 
quality  on  small  pieces  which  could  pass  from  hand  to  hand. 
To  prevent  fraud  governments  gradually  assumed  to  them- 
selves the  fimction  of  thus  stamping  or  manufacturing  coins 
and  all  that  coinage  of  money  means  is  that  the  metal  has  been 


SMITH'S  FINANCIAL  DICTIONARY.  315 

tested,  weighed  and  stamped  or  certified  by  government  au- 
thority. The  metal  so  stamped  is  no  more  valuable  than  be- 
fore except  in  so  far  as  it  may  be  more  acceptable  to  the  re- 
ceiver for  reasons  of  convenience. 

On  the  other  hand,  in  international  transactions  or  any 
transaction  involving  large  amounts  the  weighing  process  is 
more  convenient  than  the  counting  of  the  individual  pieces 
and  is  commonly  resorted  to,  the  certification  or  stamp  being 
accepted  as  to  quality. 

Thus,  the  original  principle  as  to  money  is  recognized  the 
world  over  every  day  as  to  gold  money  and  in  silver  standard 
countries  as  to  silver  money.  At  the  same  time  all  nations 
make  use  of  representative  money  in  addition  to  real  money. 
Real  money  is  the  actual  gold  or  silver,  as  the  case  may  be, 
in  which  values  are  measured.  Representative  money  is  a 
promise  to  pay  real  money  on  demand  and  is  used  either  for 
convenience  in  handling  or  for  augmenting  the  supply. 

A  Bank  of  England  note  or  a  United  States  gold  or  silver 
certificate  is  merely  a  convenience,  a  receipt  for  real  money 
which  is  held  in  reserve  to  guarantee  the  fulfilment  of  the 
promise  to  pay.  A  United  States  note  or  a  bank  note  is  a 
promise  to  pay  based  on  credit  and  is  accepted  as  a  substitute 
for  real  money  only  so  long  as  confidence  exists  that  the 
promise  will  be  kept,  or  in  other  words,  so  long  as  the  credit 
of  the  issuer  remains  good.  A  silver  dollar  is  a  mixture  of  the 
two  forms.  It  is  real  money  to  the  extent  that  the  silver  from 
which  it  is  coined  has  value  and  it  is  representative  money 
to  the  extent  that  confidence  in  the  ability  and  good  faith  of 
the  government  to  maintain  it  on  a  parity  with  gold  causes  it 
to  be  acceptable  beyond  its  silver  value.  Minor  coinage  is  in 
the  same  class. 

An  important  attribute  of  money  is  its  power,  confirmed  by 
law,  to  discharge  debt.  This  is  known  as  the  legal  tender 
power.  In  the  original  currency  act  of  April  2,  1792,  all  gold 
and  silver  coins  issued  by  the  United  States  were  made  "a 
lawful  tender  in  all  payments  whatsoever."  It  was  soon 
found  that  the  large  amount  of  foreign  coins  in  circulation 
provided  a  constant  source  of  dispute  in  the  settlement  of 
debts  and  Congress  was  compelled  from  time  to  time  to  pass 
laws   establishing   the    legal    status    of   those    coins    and   con- 


3i6  SMITH'S  FINANCIAL  DICTIONARY. 

ferring  upon  them  specific  legal  tender  qualities.  In  1857 
"all  former  acts  authorizing  the  currency  of  foreign  gold  or 
silver  coins  and  declaring  the  same  a  legal  tender  in  payment 
for  debts"  were  repealed.  In  1853  the  full  legal  tender  qual- 
ity of  fractional  silver  coins  was  taken  away  and  from  that 
time  until  the  outbreak  of  the  Civil  War  only  full  weight  gold 
and  silver  coins  were  an  unlimited  legal  tender,  the  circulat- 
ing notes  of  state  banks  never  being  able  to  enjoy  the  privi- 
lege under  the  Constitution. 

In  1862  Congress  took  a  radical  departure  by  authorizing 
the  issue  of  United  States  notes  which  should  "be  lawful 
money  and  a  legal  tender  in  payment  of  all  debts  public  and 
private  within  the  United  States"  except  duties  on  imports 
and  interest  on  the  public  debt.  The  object  of  this  clause  was, 
of  course,  to  keep  the  notes  at  par  with  gold,  but  it  never  ac- 
complished that  result.  Not  until  1879  when  the  credit  of  the 
government  was  fully  reestablished  by  the  resumption  of 
specie  payments  did  United  States  notes  pass  currently  at 
par. 

By  the  law  of  1878  silver  dollars  were  restricted  in  their 
legal  tender  quality  when  expressly  so  stipulated  in  the  con- 
tract; otherwise  they  are  unlimited  legal  tender.  Treasury 
notes  of  1890  are  also  unlimited  legal  tender  unless  otherwise 
contracted.  Gold  certificates,  silver  certificates  and  bank 
notes  are  not  a  tender.  Fractional  silver  coins  and  minor 
coins  are  a  tender  up  to  $10  and  25  cents,  respectively. 

It  will  thus  be  seen  that  gold  is  the  only  money  of  absolutely 
unlimited  legal  tender  power  in  the  United  States.  The  same 
may  be  said  of  gold  in  connection  with  international  transac- 
tions, for,  while  no  country  can  pass  laws  binding  on  another 
country,  universal  consensus  of  opinion  accepts  gold  in  pay- 
ment of  all  obligations. 

Also  see  Moneys  of  the  world. 

For  the  use  of  the  Avord  money  in  speculative  operations 
see  For  cash. 

Money  article.  A  name  given  to  the  article  in  a  newspaper 
that  treats  of  the  money  market  and  the  other  financial  mar- 
kets, including  the  market  for  stocks  and  bonds ;  a  more  com- 
prehensive name  and  the  one  more  often  used  is  financial  arti- 
cle.    For  additional  information  see  Financial  article. 


SMITH'S  FINANCIAL  DICTIONARY.  317 

Money-bags.     A  colloquial  name  for  a  rich  man. 

Money  broker.  A  dealer  in  coin  and  paper  money  and  in 
foreign  money;  also  one  who  borrows  and  lends  money  for 
others. 

The  regular  commission  of  a  money  broker  for  negotiating 
a  time  loan  (a  loan  for  a  specified  time)  is  1-32  of  i  per  cent 
of  the  amount  borrowed  or  $31.25  on  $100,000.  The  commis- 
sion is  paid  by  the  borrower. 

A  money  broker  receives  nothing  from  the  borrower  or 
the  lender  for  effecting  a  call  loan.  The  reason  is  that  a  call 
loan  may  continue  for  a  day  only.  The  broker  expects  the 
free  negotiation  of  call  loans  to  bring  business  to  him  when 
the  borrower  on  call  becomes  a  borrower  on  time. 

Money  in  circulation.  This  term  includes  not  only  the 
money  actually  in  circulation  or  in  the  possession  of  individ- 
uals, but  also  the  money  held  in  banks  as  reserve  against  de- 
posits. 

Money  market.  This  is  a  term  applied  to  the  business  of 
lending  money  and  not  to  a  place  where  money  is  loaned,  for 
there  is  no  specific  place  (in  New  York)  for  lending  money. 

In  New  York  the  banks,  trust  companies  and  insurance  com- 
panies are  the  chief  lenders  of  money,  but  there  are  other  cor- 
porations and  not  a  few  firms  and  individuals  who  are  lenders. 
As  in  every  other  market  supply  and  demand  are  the  factors 
which  determine  prices,  or  in  other  words,  the  rates  exacted 
for  the  use  of  money.  If  the  demand  is  large  and  the  supply 
small  rates  are  high  ;  if  the  demand  is  small  and  the  supply 
large    rates  are  low. 

Money  is  stiff  when  it  commands  high  rates  of  interest.  It 
is  tight  when  it  is  difficult  to  (ii)tain  even  at  high  rates;  in 
these  circumstances  there  is  a  pinch  or  stringency  in  money. 
There  is  a  squeeze  in  money  when  it  cannot  be  borrowed  ex- 
cept at  exorbitant  rates  ;  in  a  stjueeze  a  premium  as  well  as 
interest  is  exacted  on  call  loans.  A  premium  of  1-8  per  cent  a 
day  and  interest  (at  the  rate  (>f  (1  ])er  cent),  figuring  on  the 
customary  basis  of  365  days  in  a  year,  means  a  rate  equal  to 
52  per  cent  a  year. 

Money  of  account.  The  money  in  which  people  keep  their 
accounts — in  which  they  reckon  their  transactions.  It  has 
been  described  as  the  money  in  which  people  do  their  thinking. 


3i8  SMITH'S  FINANCIAL  DICTIONARY. 

Money  rates.  Means  the  rates  of  interest  at  which  money- 
is  lending.  There  are  different  rates  for  call  money  (money 
loaned  on  call— that  is,  returnable  on  the  demand  of  the 
lender)  and  time  money  (money  loaned  on  time — that  is, 
loaned  for  a  specified  period).  The  rates  for  call  money  are 
usually  lower  than  those  for  time  money.  For  additional  in- 
formation see  Call  loan ;  also  see  Time  loan. 

Money  scrivener.  Formerly  a  name  applied  to  a  person 
who  changed  money  at  a  prescribed  rate. 

Moneys  of  the  world.  In  the  appended  table  are  given  in 
alphabetical  order  in  the  first  column  the  monetary  designa- 
tions of  the  various  countries  of  the  world ;  in  the  second  col- 
umn opposite  each  designation  is  given  the  name  of  the  coun- 
try where  the  designation  is  employed ;  in  the  third  column  is 
given  the  equivalent  in  another  monetary  designation  of  the 
same  country ;  in  the  fourth  column  is  given  the  nominal 
equivalent  in  United  States  money,  and  in  the  fifth  and  last 
column  is  given  the  nominal  equivalent  in  the  money  of  Great 
Britain. 

Gold  is  the  fixed  and  unalterable  basis  of  values  the  world 
over.  The  United  States  and  Great  Britain  are  single  gold 
standard  countries.  Therefore,  the  equivalents  in  the  moneys 
of  the  United  States  and  Great  Britain  are  actual  for  the 
moneys  of  other  countries  which  have  the  single  gold  standard 
and  really  adhere  to  it.  So  are  the  equivalents  actual  for  the 
moneys  of  countries  which  have  the  double  standard  and 
really  maintain  their  silver  money  at  its  legal  ratio  with  their 
gold  money. 

But  the  equivalents  are  nominal  and  not  actual  for  the 
moneys  of  countries  which  have  the  gold  standard  and  do  not 
really  adhere  to  it;  and  the  equivalents  also  are  nominal  and 
not  actual  for  the  moneys  of  the  countries  which  have  the 
double  standard  and  do  not  really  maintain  their  silver  money 
at  its  legal  ratio  Avith  their  gold  money. 

So,  too,  the  equivalents  are  nominal  and  not  actual  for  the 
moneys  of  countries  which  have  the  single  silver  standard. 
Moneys  that  are  based  on  silver  are  depreciated ;  such  moneys, 
also,  are  fluctuating  in  \alue,  for  the  reason  that  silver  is  a 
commodity  and  has  no  fixed  natural  value  like  gold  moneys, 
or  moneys  based  on  gold. 


SMITH'S  FINANCIAL  DICTIONARY. 


319 


Designation. 


Country. 


Equivalent 
Designation. 


Equiva- 
lent in 
United 

States 
money. 


Equivalent 

in  money 

of 

Great 

Britain. 


Abassi   

Alexander  

Alphonse    

Anna    

Argentine    

At    

Bani  

Rat  

Bia   

Bolivar    

Boliviano    

Candareen    (or 

fun  or  fen)  . . . . 
Cash  (or  li  or  zin) 

Cash    

Cent    

Cent    

Cent    

Cent    

Cent    

Centavo    

Centavo    

Centavo    

Centavo    

Centavo    

Centavo   

Centavo    

Centavo   

Centavo    

Centavo   

Centesimo   

Centime    

Centime    

Centime    

Centime    

Centimo    

Centime    

Centimo    

Centimo    

Centimo    

Centimo    

Chai    (or   pul)  .  .  . 

Colon    

Condor    

Condor    

Copeck    

Cowry  (or  bia) . . 

Crown  

Crown  

Crown   

Crown  

Crown  

Crown  


I 


Persia    

Bulgaria    

Spain    

India    (British)    . 

Argentina    

Siam    

Roumania    

iSiam    

Siam    

Venezuela    

Bolivia    


China    

China    

Korea    

Canada    , 

Liberia    , 

Newfoundland  . . 
Santo  Domingo. 
United  States.  . .  . 

Argentina    

Bolivia    

Chile    

Colombia    

Ecuador    

Mexico    

Paraguay    

Peru    

Uruguay    

Venezuela    

Italy    

Belgium    

France    

Haiti    , 

Switzerland    .  . .  . 

Costa   Rica 

Guatemala    

Honduras    

Nicaragua 

Salvador  

Spain  

Persia    

Costa  Rica 

Chile 

Colombia    

Russia    

Siam    

Austria-Hungary 

Denmark    

Germany    

Great  Britain  .  . . 

Norway   

Portugal    


4  chais 

20  levs 

25   pesetas. . . 

4  pice 

5  pesos 

2   lots 

i-ioo  lei 

See  Tical. . . 
See  Cowry. . 
20  centavos . 
100  centavos. 


10   cash 

i-io  candareen. . 

i-ioo  Hang 

i-ioo  dollar 

i-ioo  dollar 

i-ioo  dollar 

i-ioo  dollar 

i-ioo  dollar 

i-ico  peso 

I- 1 00  boliviano.  .. 

i-ioo  peso 

i-ioo  peso 

i-ioo  Sucre 

i-ioo  peso 

i-ioo  peso 

I-IOO    sol 

i-ioo  peso 

i-ioo  venezolano, 

i-ioo   lira 

i-ioo  franc 

i-ioo  franc 

i-ioo  gourde 

i-ioo  franc 

T-ioo  colon 

i-ioo  peso 

i-ioo  peso 

i-ioo  peso 

I-IOO  peso 

i-ioo   peseta 

^    abassi 

100  centimos.  . .  . 

20   pesos 

10  pesos 

i-ioo   ruble 

I-IOO    lot 

100    heller 

100   ore 

10  marks 

5  shillings 

100   ore 

TO    milreis 


$  I  cts. 
103.40 
3185-90 
4i82.38 

i02.02 

4I82.38 

101.82 

00.19 


19.29 
96.47 

01.00 
00.10 

00.09 

01.00 
01.00 
01.01 
01.00 
01.00 

00.96 
00.96 
00.36 
00.96 
00.96 
00.98 
00.96 
00.96 
00.96 
00.96 
00.19 
00.19 
00.19 
00.96 
00.19 
00.46 
00.96 
00.96 
00.96 
too.961 
I00.I91 

I00.85I 
I46.53I 

7I29.98I 

9'64.76l 

'00.51 1 

'  .009I 

120.26 

1 26.79 

2138.21 

1 121.66 

1 26.79 

10I80.46 


U 


s.  I    d. 

IOI.O7 
15I10.32 
19I09.89 

01.00 

09.89 
00.89 
00.09 


19 


09.51 

11-57 


320 


SMITH'S  FINANCIAL  DICTIONARY. 


Desig'nation. 


Country. 


Equivalent 
Designation. 


Equiva- 
lent in 

United 
States 

money. 


Equivalent 

in  money 

of 

Great 

Britain. 


Crown  

Decimo   

Dime   

Dime   

Dime   

Dime    

Dime    

Dinar 

Dinero    , 

Dollar    

Dollar    

Dollar    

Dollar    

Dollar    

Doubloon    

Doubloon    

Doubloon    . . . ., 

Doubloon    

Doubloon    

Doubloon  Isabella 

Drachma   

Ducat   

Eagle  

Escudo    

Farthing  

Fen    

Florin    

Florin    

Florin    (or  guild- 

er)    

Franc   

Franc   

Franc   

Fuang    

Fun    

Gourde    

Guilder   

Guinea    

Heller    

Imperial    

Kopeck   

Kran     (or    sahib- 

ghiran)     

Krcutzer   I 

Krone    | 

Lei    I 

Lepton    

Lev 

Levantine    thaler 


Li   ... 

Liang 
Liang 


Sweden    

Colombia    

Guatemala    

Honduras    

Nicaragua   

Salvador    

United  States.  . . 

Servia     

Peru     

Canada    

Liberia    

Newfoundland  . 
Santo  Domingo. 
United  States. . . 

Chile    

Guatemala    

Honduras 

Nicaragua    

Salvador    

Spain    

Greece   

Austria-Hungary 
United  States.  . . 

Chile    

Great  Britain.  . .  . 

China    

Austria-Hungary 
Great  Britain. . . . 


I  « 


Netherlands    .  . . . 

Belgium    

France    

Switzerland    .  . .  . 

Siam    

China    

Haiti 

Netherlands  .  . .  . 
Great  Britain.  . .  - 
Austria-Hungary 

Russia   

Russia   


Persia    

Austria-Hungary 
Same  as  crown.. 

Roumania    

Greece  

Bulgaria    

Austria-Hungary 


China 
China 
Korea 


100   ore 

10  centavos 

10  centimes.  . .  . 
10  centimes.  . .  . 
10  centimes. . . . 
10  centimes. . . . 

10  cents 

100   paras 

10  centavos 

100    cents 

100    cents 

100    cents 

100    cents 

100    cents 

10  pesos 

See   Onza 

See   Onza 

See   Onza 

See   Onza 

26  pesetas 

100  lepta 

(Trade   money) 

10  dollars 

5    pesos , 

%    penny 

See  Candareen.  , 
100  kreutzers. .., 
2  shillings 


100    cents 

100  centimes. . . , 
100  centimes.  . . . 
100  centimes. . . . 

2  song  peis 

See  Candareen.  . 
100   centimes. . . . 

See   Florin 

21    shillings 

i-ioo  crown 

15  rubles 

See    Copeck 


20    shahis 

i-ioo    florin. . .  . 

See    Crown 

100  bani 

1 1- 100  drachma.  . 

100  stotinki.  . . . 
I  See  Marie  The 
I     rcsa   thaler.  . . 

I  See    Cash |     I 

(See  Tacl |     | 

|foo  cash I     '09.96 


cts. 

26.79 
09.64 
09.6/ 
09.64 
09.64 
09.64 

10.00 
19.29 
09.64 
00.00 
00.00 

01.38 

00.00 
00.00 

64.99 


I0I.67 
19.29 
28.78 

00.00 
'82.49 

00.50 
40.52 

48.66( 

40.19I 
19.291 
19.29I 
1 9.29 1 

07.27 1 

96.471 

10.98 
00.20 

71-^5 


\£ 


17.04 
00.40 

19.29 
00.19 
19.29 


d. 
01.21 
04.7s 
0475 
0475 
047;. 
0475 

1 04-93 

|09-5i 

I0475 

4101.31 

4I01.31 

4|02.00 

4(01.31 

4ioi.3i 


15 


00.00 


00 


9 

01 


07.41 
09.51 
04.83 
01.16 
7J06.00 
1 00.25 


07.98 
00.00 

19.82 

09-51 
09.51 

09-51 
03-55 

11.57 


01 100.00 

[00.09 

1 1 '08.59 


08.40 
00.19 

09-51 
00.09 

09-51 


I04.91 


SMITH'S  FINANCIAL  DICTIONARY. 


321 


Designation. 


Country. 


Equivalent 
Designation. 


Equiva- 
lent in 

United 
States 

money. 


Equivalent 

in  money 

of 

Great 

Britain. 


Libra    

Lira    

Lira      (or    pound 
or    medjidie) . .. 

Lot  

Louis    

Mace    (or  tsien) . 
Mahbub    


I 


Marie  Theresa  (or 
Levantine)  tha- 
ler   

Mark   

Markkaa    

Medio   real 

Medjidie    

Milrei   

Milrei    

Mohur    

Napoleon    

Ochr-el-guerche    . 

Onza  (or  doub- 
loon)     

Onza  (or  doub- 
loon)     

Onza  (or  doub- 
loon)     

Onza  (or  doub- 
loon)     

Onza  (or  doub- 
loon)     

Ore    

Ore    

Ore    

Para    

Para    

Penebat    

Penni    

Penny    

Peseta   

Peseta   

Peso    

Peso    

Peso    

Peso    . . .  ., 

Peso    

Peso    

Peso    

Peso    

Peso    

Peso    

Peso    , 

Pfennig    


Peru 

Italy 


ID  soles 

100  centesimi. 


Turkey 
Siani    . 
France 
China  . 
Tripoli 


Austria-Hungary 

Germany    

Finland    

Ecuador    

Turkey    

Brazil    

Portugal    , 

India    (British).. 

France    , 

Egypt 


Guatemala    .... 

Honduras    

Nicaragua    . ... . 

Salvador    

Spain    

Denmark    

Norway   

Sweden    

Servia    

Turkey    

Persia    

Finland    

Great    Britain. . , 

Ecuador    , 

Spain    

Argentina    

Chile    ._ 

Colombia    ....,, 

Guatemala    

Honduras    

Mexico    , 

Nicaragua    

Paraguay    

Salvador    

Uruguay    

Venezuela    

Germany   


100  piasters. . . . 

y2    at 

20  francs 

10  candareen. . . 
20  piasters  Tur- 
kish    


(Trade   money) 
100  pfennigs. . . . 

100   penni 

5  centavos 

See    Lira 

1,000  reis 

1,000  reis 

15    rupees , 

20  francs 

i-io  piaster. . . . , 


i-ioo  crown.  . .  . 
i-ioo  crown.  . .  . 
i-ioo   crown.  . .  . 

i-ioo  dinar 

1-40   piaster. ... 

10    shahis 

I- 100  markkaa. . 

4  farthings , 

20  centavos , 

100  centimos.  . . . 
100  centavos. . . . 
100  centavos. . . . 
100  centavos. . . . 
100  centimos.  . .  . 
100  centimos. . . , 
100  centavos. . . . 
100  centimos.  . . . 
100  centavos. . . . 
100  centimos.  . . . 
100  centavos. . . . 
See  Venezolano. 
i-ioo  mark 


cts. 

86.65 

19.29 


\£ 


3964 
00.90 

3185-90 
10.00 

87.92 


01.31 
23.82 
19.29 
04.87 


15 


15 


54-63 
08.04 
86.65 
85-90 
00.49 

73-89 

73-89 

73-89 

73-89 

3.89 
00.26 
00.26 
00.26 
00.19 
00.01 
08.52 
00.19 
02.02 

09-73 
19.29 
96.47 

36.49 
96.47 

96-47 
96.47 

98-39 
96.47 

96.47 
96.47 
03.42 

00.23 


s, 
00 


18 


2 

4 
00 

15 


04 


cl. 
00.00 

09-51 

00.80 
00.44 

10.32 
0493 

07.36 


01.96 

11.74 
09.51 
02.37 

02.93 

05.28 

00.00 

10.32 
00.24 

08.24 


04  08.24 


04 
04 


04 


08.24 
08.24 

08.24 

00.12 
00.12 
00.12 
00.09 
005 
04.20 
00.09 
01.00 

04.86 
09-51 

11-57 
06.00 

11-57 
11-57 
11-57 


4100.52 


11-57 
11-57 
11-57 
03.00 

00.11 


322 


SMITH'S  FINANCIAL  DICTIONARY. 


Designation. 


Countrj'. 


Equivalent 
Designation. 


Equiva- 
lent in 
United 
States 
money. 


Equivalent 

in  money 

of 

Great 

Britain. 


Piaster    Egypt 


Piaster    . . . . 

Pice    

Pie   

Pound    

Pound    . . . . 

Pound    

Pul    

Quadruple 
onza)   . . . . 

Real  

Real   

Real   

Rei   

Rei    

Reichsmark 

Rin    

Rixdaler  . ... 

Ruble   

Rupee    

Sahibghiran 
Salung   .... 

Sen    

Shahi    

Shilling  . . . . 

Sol   

Song  peis   . 

Sou    

Sovereign  . . 


Stiver    

Stotinki    

Sucre  

Tael  (or  liang) . 

Tamling    

Thaler  

Tical   (or  bat)  . . 
Toman    


Tsien    

Venezolano      (or 

peso)     

Yen    

Zin   


Turkey    

India    (British) 
India    (British) 
Egypt   ......... 

Great    Britain. . 

Turkey    

Persia    


(or| 


Spain 

Ecuador    

Paraguay    

Spain    

Brazil    

Portugal   

Same  as  mark. 

Japan    

Netherlands    . . 
Russia  .-. 


India    

Persia    

Siam    

Japan    

Persia    

Great    Britain. 

Peru    

Siam    

France    

Great    Britain. 

Netherlands    . 

Bulgaria    

Ecuador    

China    

Siam   

Germany    .... 

Siam    

Persia    

China    


Venezuela 
Japan  . . . 
China    .  . . 


10    ochr-el-guer- 

che    

i-ioo   lira 

3  pie 

1-3    pice 

100  piasters 

20    shillings 

See  Lira 

See   Chai 


$ 


cts.  i 
00.49 1 

04-39) 

00. 50 1 

00.161 

94-30 
86.65 


£    s. 


10    centavos. 


1-1,000  milrei. . 
1-1,000  milrei.  . 

See  Mark 

i-io  sen 

2J/2  florins 

100  copecks. . . . 

16  annas 

See   Kran 

2   fuango 

i-ioo  yen 

1-20  kran 

12  pence 

100  centavos. . . 

2  ats 

5   centimes 

I    pound,    or    20 

shillings   

1-20  florin 

i-ioo  lev 

100   centavos. . . 

10  mace 

4   ticals 

3  marks 

4  salungo 

10  kran  (50  abas 

si)    

See  Mace '. 


ISI73-89 
09.64 
12.05 
12.05 
•005^ 
00.01 

•049 
00.48 

51-45 
32.44 

14-54 
00.49 
00.85 

24-33 
96.47 

1 03 -63 
I00.96 


4- 


TOO  centavos. 

Too-sen 

See    Cash. . . 


86.65 
02.09 
00.19 
96.47 
00.00 
32.72 
71.46 
58 


1 1 70.40 1 


96.471 
49.84! 


100.24 

|02.l6 

[00.24 
1 00.08 
0003.77 

oojoo.oo 


3I04I08.24 
04-75 

05-94 

05-94 

.0027 

.005 


.024 
01.55 
01.37 


I  04.00 

07.11 
00.24 
00.42 
00.00 
11.78 
01.78 
1 00.47 


3|ii-57 
2|oo.s8 


SMITH'S  FINANCIAL  DICTIONARY. 


323 


The  following  tables  show  the  equivalents  of  the  units  of 
gold-using  countries  in  each  other : 

EQUIVALENTS  IN  GOLD  UNITS. 


Egypt. 
Pound. 


Great  Britian. 
Pound.  Pence. 


Turkey. 

Portugal. 

Pound. 

Milrei. 

1 .124395 

4-574929 

1. 106992 

4.5041 18 

1. 000000 

4.068791 

0.2457733 

1. 000000 

•2352574 

0.9572129 

.2274689 

0.9255233 

•2194537 

.8929110 

■1242359 

•5054899 

.1170309 

.4761744 

.1133844 

•4613374 

.0914332 

.3720225 

.0830243 

.3378086 

•0737995 

.3002745 

.0609594 

.2480308 

.0541860 

.2204715 

.0460912 

.1875355 

•0438907 

.1785822 

Egypt    ......... 

Great  Britain. . . 

Turkey   

Portugal    

Uruguay   

United    States... 

Argentina  

Brazil    

Russia   

Japan    

Netherlands   .  ... 

Chile   

India    (British). 
Scandinav'n  Un. 

Germany  

Austria-Hung'y 
Latin  Union.  . .  . 


1. 000000 
.9845219 
.8893669 
.2185826 
.2092301 
•2023033 
.1951748 
.1104913 
.1040834 
.1008403 
.081317(5 

.0738391 
.0656348 
.0542152 
.0481912 
.0409920 
.0390350 


1.015721 
1 .000000 

.9033491 
.2220191 
.2125195 
.2054838 

.1982433 
.1122284 
.1057198 
.1024257 
.0825961 
.0749999 
.0666667 
.0550676 
.0489489 
.0416365 
.0396487 


243.773 

240.000 

216.804 

53.285 

51.005 

49.316 

47.578 

26.935 

25-373 

24.582 

19.823 

18.000 

16.000 

13.216 

11.748 

9.993 

9.516 


Uruguay. 
Peso. 


United 
States. 
Dollar. 


Argentina. 
Peso. 


Brazil. 
Milrei. 


Russia. 
Ruble. 


Egypt    ......... 

Great   Britain. .  , 

Turkey  

Portugal    

Uruguay    

United    States.  . 

Argentina  

Brazil    , 

Russia   

Japan    

Netherlands   . . . 

Chile  

India   (British)  . 
Scandinav'n  Un 

Germany 

Austria-Hung'y 
Latin  Union. . . . 


4.779427 
4.705450 
4.250664 
1.044700 
1. 000000 
0.9668939 
.9328239 
.5280851 
.4974592 
.4819590 

.3886517 
.3529085 
.3136967 

.2591177 
.2303265 

.1959183 
.186=^648 


4.943073 
4.866563 
4.396206 
1 .080470 
1.034240 
1. 000000 
0.9647634 
.5461666 
.5144920 
.4984611 
.4019590 
.3649920 
.3244376 
.2679898 
.2382128 
.2026265 
.1929527 


5.123611 
5.044307 
4.556770 
I.I  19932 
1. 0720 1 4 
1.036524 
1. 000000 
0.5661 145 
.5332831 
.5166667 
.4166400 
.3783228 
.3362872 
.2777778 
.2469132 
.2100271 
.2000000 


9.050485 
8.910401 
8.049202 
1.978279 

1.893634 
1.830943 
1.766427 
1 .000000 
0.9420056 
.9126539 

.7359641 
.6682795 
.5940267 
.4906742 
•436 I 54 I 
.3709975 
•3532854 


9.607676 
9.458968 
8.544750 
2. 1 0007 1 
2.0 1 02 1 5 
1.943665 
1. 875 1 77 
1. 061 565 
1. 000000 
0.9688413 
.7812736 
.7094220 
.6305978 
.5208824 
.4630059 
.3938379 
.3750353 


Continued  on  next  page. 


324 


SMITH'S  FINANCIAL  DICTIONARY. 


EQUIVALENTS  IN  GOLD  UNITS. 
Continued  from  preceding  page. 


Japan. 
Yen. 


Netherlands 

Guilder  or 

Florin. 


Chile. 
Peso. 


India. 
(British). 
Rupee.  Annas. 


Egypt    ......... 

Great   Britain.  . . 

Turkey   

Portugal    

Uruguay   

United   States.  .. 

Argentina   

Brazil    

Russia   

Japan    

Netherlands   ...  . 

Chile  

India   (British). 
Scandinav'n  Un. 

Germany  

Austria-Hung'y 
Latin  Union.  . .  . 


9.916666 

9763175 

8.819555 

2.167611 

2.07486s 

2.006174 

1.935484 

1.095706 

1.032161 

1. 000000 

0.8064000 

0.7322376 

0.6508784 

0-5376344 
0.4778965 
0.4065041 
0.3870968 


12.29745 
12.10711 
10.93695 
2.688010 
2.572998 
2.487816 
2.400154 
1.358762 
I. 27996 I 
1.240079 
1. 000000 
0.9080328 
0.8071409 
0.6667094 
0.5926296 
0.5040973 
0.4800307 


13.54296 
13-33334 
12.04466 
2.960256 
2.833596 
2.739786 
2.643246 
1.496380 
1.409598 
1.3656769 
1.101282 
1 .000000 
0.8888895 

0.7342349 
0.6526522 

0.5551532 
0.5286491 


15.23582 
15.00000 
13-55024 
3.330286 

3.187793 
3.082257 

2.973649 
1 .683426 

1.585797 
1.536385 
1. 238941 
1. 1 24999 
1. 000000 
0.8260136 
0.7342332 
0.6245469 
0.5947298 


243-773 
240.000 
216.804 
53.285 
51005 
49.316 
47-578 
26.935 
25-373 
24.582 
19.823 
18.000 
16.000 
13.216 
11.748 

9.993 
9.516 


Scandina- 
vian Union. 
Crown. 


Germany. 
Mark. 


Au.stria- 

Hungary. 

Crown. 


Latin  Union. 
Franc. 


Egypt    

Great   Britain 

Turkey    

Portugal    

Uruguay    

United  States 

Argentina    

Brazil    

Russia    

Japan    

Netherlands    

Chile    

India    (British) 

Scandinavian  Union. 

Germany   

Austria-Hungary    .  . . 
Latin  Union 


18.44500 
18.15951 
16.40437 

4-03 1 7'^7 
3-859250 

3-731485 

3.600000 

2.038012 

1.919819 

1.860000 

1.499904 

1. 361 962 

1. 2 1 0634 

1. 000000 

0.8888875 

0.7560976 

0.7200000 


20.75066 
20.42948 
18.45495 
4-535733 
4.341662 
4.197927 
4.050006 
2.292767 
2-159800 
2.092503 
1.687395 
1. 532210 
1. 361 965 
1. 1 25002 
1. 000000 
0.85061 1 1 
0.8 1 000 1 2 


24.39500 
24.01741 
21.6961 1 

5.332323 
5.104169 

4.935189 
4.761290 
2.695436 
2.5391 16 
2.460000 
1.983744 
1-801305 
1.601161 
1. 322581 
1. 1 75625 
1 .000000 
0.9522581 


25.61806 
25.22154 
22.7838s 
5.599662 
5.360069 
S.182618 
5.000000 
2.830573 
2.666415 

2.583333 
2.083200 
1.891614 
1. 68 1 436 
1.388889 
1.234566 
1.050136 
1. 000000 


Following  are  the  monetary  standards  (or  standards  of 
value)  and  monetary  units  of  the  various  countries  of  the 
world : 


Country. 


standard. 


Monetary  unit. 


Argentina  |Gold 

Austria-Hungary  |Gold 

Belgium    IGnld 

Bolivia   ISilvcr 

Brazil IGold 

British  Possessions  in  North  Amer-I 

ica  (except  Newfoundland) IGnld 

Bulgaria  |Gold   . 


Peso 

Crown 

Franc 

Boliviano 

Milrei 

Dollar 
Lev 


SMITH'S  FINANCIAL  DICTIONARY. 


325 


Country. 


Standard. 


Monetary  unit. 


Central  American  States :                     1  I 

Costa   Rica |Gold    jColon 


British  Honduras. 


Guatemala 
Honduras 
Nicaragua 
Salvador  . 
Chile    


China 


Colombia    

Cuba    

Denmark    

Ecuador    

Egypt   

Finland   

France  

Germany , 

Great  Britain. . . 

Greece    

Haiti    

India    (British), 

Italy 

Japan    

Korea 

Liberia   

Mexico 

Netherlands  .  . . . 
Newfoundland 

Norway 

Paraguay  


Persia 

Peru    

Portugal   

Roumania  .  . .  . 

Russia   

Servia  

Siam    , 

Spain   

Sweden   

Switzerland   . 

Turkey  

United  States 
Uruguay  .... 
Venezuela  .  . . 


IGold    iDollar 


Silver |Peso 

I 

( 


Gold 


Silver 


Peso 


Tael 


r  Amoy 
Canton 
Chefoo 
Chin   Kiang 
Fuchau 
Haikwan 

(Customs) 
Hankow 
Hongkong 
Niuchwang 
Ningpo 
Shanghai 
Swatow 
Takau 
'[  Tientsin 

Silver    Peso 

Gold    Peso 

Gold    Crown 

Gold    Sucre 

Gold    I  Pound  (100  piasters) 

Gold    JMarkkaa 

Gold    jFranc 

Gold    iMark 


Gold    

Gold    

Gold    

Gold    

Gold    

Gold    

Silver .iLiang 

Gold    IDollar 

Silver    |Peso 

Gold    iFlorin 

Gold    IDollar 

Gold    iCrown 

Silver |Peso 

Silver    |Kran 

Silver  I  Sol 

Gold    iMilrei 

Gold   |Lei 

Gold    I  Ruble 

Gold iDinar 

Silver    jTical 

Gold    iPeseta 

Gold    I  Crown 

Gold    iFranc 

Gold    I  Piaster 

Gold   IDollar 

Gold    iPeso 

Gold    iBolivar 


Pound  sterling 

Drachma 

Gourde 

Pound  sterling 

Lira 

Yen 


S26 


SMITH'S  FINANCIAL  DICTIONARY. 


Following  is  a  description  of  the  monetary  systems  of  the 
world.  The  calculations  as  to  the  values  of  the  different 
moneys  are,  with  few  exceptions,  those  of  the  Bureau  of  the 
Mint  in  the  Treasury  Department  of  the  United  States,  and 
where  the  compilation  of  the  Bureau  of  the  Mint  has  been 
supplemented  the  same  basis  of  calculation  was  employed. 
In  the  calculations  the  gram  is  taken  at  15.43235639  grains. 
The  other  facts  as  to  the  various  monetary  systems  likewise 
are  largely  from  the  compilation  of  the  Bureau  of  the  Mint. 

ARGENTINA. 

While  formally  adopting  the  double  standard  the  Argentine  law 
of  1881  restricted  the  coinage  and  use  of  silver  as  legal  tender  and 
the  metallic  standard  may  therefore  be  said  to  be  gold.  The  actual  currency 
is  depreciated  paper,  which  tiuctuates  greatly  in  value.  Gold  is  quoted  at 
so  much  premium ;  for  instance,  180  premium  means  $280  paper  to  $100 
gold.  Gold  coins  are  full  legal  tender.  Silver  coins  are  legal  tender  only 
to  the  amount  of  10  pesos  and  bronze  coins  to  the  amount  of  i  peso. 

The  weight,  fineness,  etc.,  of  the  coins  of  Argentina  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
Weight 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United   States 

gold  coin. 

Argentine     

1  Grams.  \  l,000tlis  |  Gratns.   \    Grains. 
8.064^1      onni   7  7>c8nlTc>/! /iC/15? 

Grains. 

112.0088 

56.0044 

$4-8238 
2.41 19 

Half  argentine   

4.0322 

900 

3.6290 

62.2271 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United   States 
silver  dollar. 


Peso    

50  centavos 
20    centavos 
10    centavos 
5    centavos . 


Grams.  | 
25.0000 
12.50001 

5.OOO0I 

2.5000! 

1. 2500 1 


l,000ths 
900 
900 
900 
900 
900 


Grams. 
22.5000 
11.2500 
4.5600 
2.2500 
1.1250 


G^-aii:s.  I  Grains. 
385.8089I347.2280 
I92.9O44I  173.6140 
77. 161 7I  69.4456 
38.5808I  34-7228 
I9.29O4I    17.3614 


$0.9352 

•      .4676 

.1870 

•0935 
.0467 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

Grams. 

Grains. 

• 

20  centavos..  . 

4.0000 

75   per  cent  cop- 

61.7294 

$0.1929 

10  centavos..  . 

3.0000 

per,  25  per  cent 

\     46.2970 

.0964 

5  centavos 

2.0000 

nickel. 

30.8647 

To  the 

.0482 

Bronze. 

-  amount 
of  I  peso. 

. 

95  per  cent  cop- 

2 centavos 

10.0000 

per,  4  per  cent 

154-3235 

.0192 

I    centavo 

5.0000 

tin,   and    i    per 
cent   zinc. 

77.1617 

.0096 

SMITH'S  FINANCIAL  DICTIONARY. 


327 


AUSTRIA-HUNGARY. 

The  new  nionclary  system  of  Austria-Hungary  is  gold  monumet- 
allic;  the  gold  crown  of  100  hellers  (farthings)  is  the  monetary  unit. 
The  new  currency  consists  of  gold,  silver,  nickel  and  bronze  coins.  The 
gold  coins  provided  for  are  the  20-crown  piece  and  the  lO-crown  piece. 
Besides  these  gold  coins  there  are  to  be  coined  as  heretofore,  as  trade  coins, 
Austrian  gold  ducats. 

The  new  silver  coin  is  the  i-crown  piece.  The  ratio  of  gold  to  sub- 
sidiary silver  in  the  new  system  is  I  to  13.69.  Silver  is  coined  only  on 
account  of  the  state.  Silver  coins  are  unlimited  legal  tender  to  the  state  at 
their  nominal  value ;  to  private  parties  to  the  amount  of  50  crowns.  The 
Levantine  or  Maria  Theresa  silver  thalers  continue  to  be  stamped  as  trade 
coins. 

The  coins  of  the  new  system,  multiplied  by  two,  are  of  the  same  value 
as  the  pieces  of  the  old  silver  and  paper  currency,  i  silver  or  paper  florin 
being  equal  to  2  crowns   and  i  kreutzer  to  2  hellers. 

The  weight,  fineness,  etc.,  of  the  coins  of  Austria-Hungary  are  as 
follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United   States 

gold  coin. 


Grams. 


l.OOOths 


20-crown    piece 
10- crown    piece 

4    ducats 

I    ducat 


6.7750 
3-3875 

13-96361  986  fr 
3-49091986,3 


900    6.097s 

900 1  3 0487 

13.7696 

3-4424 


Grains.    \    Grains. 


i04.5c;52 

52.2776 

215.4912 

53.8728 


94.0997 

47.0498 

212.4983 

53-1245 


$4-0525 
2.0262 

9-1515 
2.2878 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United   States 
silver  dollar. 


S-crown  piece 

l-crown   piece 

Marie    Theresa    thaler 

(Levantine)    , 

2  florins 

I   florin 

Quarter   florin 

20  kreutzers 

10  kreutzers 


Grams. 

24.0000 

5.0000 

28.0668 

24.6914 

12.3457 

5-3419 

2.66661 
1.66661 


l,000ths 

Grams. 

900 

21.6000 

835 

4-1750 

833;\ 

23-3890 

900 

22.2222 

900 

II. nil 

520 

2.7777 

500 

1-3333 

400 

.6666 

Grains.    I  Grains. 
370.3765 1 333.3388 
77.1617  6J..43OO 


433-1368 

381.0462 

190.5231 

82.4381, 

41.1529 

26.7205 


360.9473 

342.9416 

171.4708 

42.8678 

20.5764 

IO.2882I 


$0.8978 
-1735 

.9722 
.9237 
.4618 
•II54 
-0554 
.0277 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

W^eight. 

Legal  tender. 

Value. 

Nickel. 

20   hellers.  . .  . 
10   hellers.  . . . 

Grams. 
4.0000 
3.0000 

[  Pure    nickel 

Grains. 
\  61.7294 
(  46.2970 

(To  the 
i    amount 
of    10 
crowns. 

I   $0.0405 
1        .0202 

Bronze. 

2  hellers 

I   heller 

3-3333 
1.6666 

95   per  cent   cop- 
per, 4  per  cent 
tin,   and    i    per 
cent   zinc. 

1 

I51-44II 
f  25.7205 

J 

On    public 
account 
10  crowns 
■     and    pri- 
vate ac- 
count I 
crown. 

.0040 
.0020 

3^8 


SMITH'S  FINANCIAL  DICTIONARY. 


The. 


BELGIUM. 
For  general  information  as  to  the  money  of  Belguim  see  Latin  Union, 

The  weight,  fineness,  etc.,  of  the  coins  of  Belgium  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


100  francs 
50  francs. 
20  francs. 
10  francs. 
5  francs.  . 


Grams. 

i,000ths 

Grams. 

Grants. 

Graifis. 

32.2580 

900 

29.0322 

497.8178 

448.0360 

16.1290 

900 

i4.=;i6i 

248.9089 

224.0180 

6.4516 

900 

5.8064 

99-5635 

89.6072 

3-2258 

900 

2.9032 

49-7817 

44.8036 

I.6129 

900 

1.4516 

24.8908 

22.4018 

$19.2952 

9.6476 

38590 

1-9295 

.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United   States 
silver  dollar. 


5  francs . . . 
2  francs . . . 
I  franc. . . . 
50  centimes 
20  centimes 


Grams. 

l.OOOths 

Grams. 

Grains. 

Grams.    | 

25.0000 

900 

22.5000 

385-8089 

347.2280 

10.0000 

835 

8.3500 

154-3235 

128.8601 

5.0000 

835 

4-1750 

77.1617 

64.4300 

2.5000 

835 

2.0875 

38.5808 

32.2150 

1. 0000 

835 

0.8350 

15-4323 

12.8860 

$0.9352 
•3470 

-1735 
.0867 

•0347 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

Grams. 

Grains. 

20    centimes.  . 

7.0000 

1  75   per  cent  cop- 

,  108.0264 

,  To  the 

f     $0.0385 

10   centimes. . 

4.5000 

'-     per  and  25  per 

\    69.4456 
'     46.2970 

-   amount 

,          .0192 

5    centimes. .  . 

3.0000 

^      cent   nickel. 

1    of  5 

'          .0096 

francs. 

Copper. 

2    centimes. .  . 
I    centime 

4.0000 
2.0000 

{-Pure   copper 

*     61.7294 
'     30.8647 

,  To  the 
s  amount    of 
2   francs. 

(          -0038 
(          .0019 

BOLIVIA. 

Bolivia  has  the  single  silver  standard  and  the  money  of  account 
is  the  boliviano  or  silver  peso.  The  real  monetary  unit  is  the  20-centavo 
piece  and  all  transactions  are  conducted  on  that  basis.  The  banks  redeem 
their  notes  in  no  other  coin  and  exchange  on  Europe  is  based  on  it. 

The  weight,  fineness,  etc.,  of  the  silver  coins  of  Bolivia  are  as  follows : 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared  with 
silver  in 
United  States 
silver  dollar. 


Grams.  I  l.OOOths  I   Gratns.      Grains 

Boliviano  25.oooo(  900122.5000  385.8089 

50  centavos 12.5000'  900I  11.2500  192.9044 

20  centavos 4-5000]  900I  4.0500    69.4456 

10  centavos 2.2500I  900I  2.02^0!  34.7228 

5  centavos I   1.T250I  900I   1.0125I   17.3614 


Grains. 
347.2280 
173.6140 

62.5010 

31-2505 
15.6252 


$0-9352 
.4676 
.1683 
.0841 
.0420 


SMITH'S  FINANCIAL  DICTIONARY. 


329 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

Grams. 
5.0000 
2.S000 

10.0000 

5.0000 

/  75  per  cent  cop- 

t      per  and  25  per 

cent   nickel. 

95  per   cent  cop- 
(      per,  4  per  cent 
"j      tin,    and    I    per 
cent  zinc. 

Grains, 

s  77.1617 

1    38.5808 

)  154.3235 
j-    77.1617 

$0.0964 
.0482 

.0096 
.0048 

5  centavos. .  .. 

Bronze. 

I    centavo. . . . 
Half    centavo. 

BRAZIL. 

Brazil  has  the  gold  standard.  At  the  mint  par  between  Brazil  and 
England  i  milrei  equals  26.93  pence,  which  makes  the  piece  of  20  mil- 
reis  worth  £2  4s.  lod.  The  silver  money  is  not  legal  tender  beyond  20 
milreis.  The  republic  sanctioned  large  issues  of  paper  money  by  banks, 
in  consequence  of  which  the  milrei  constantly  fluctuates.  ♦  One  thousand 
milreis  is  called  a  conto ;  1,000  contos  a  conto  de  contos. 

The  weight,  fineness,  etc.,  of  the  coins  of  Brazil  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


20  milreis 
10  milreis 
5    milreis. 


Grams.   \  l.OOOths  )  Grams.   \    Grains. 


17.9296 
8.9648 

4.4824 


917I  16.44151276.6973 
917I  8.2207I138..3486 
917I    4.IIO3I    69.1743 


Grains.  \ 
253.73141 
I26.8657I 

63.4328I 


$10.9273 
5-4636 
2.7318 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 

wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


i  Grams.  \  l.OOOths      Grams.  \    Grains.    \    Grains.   \ 

2   milreis I25.5000I      917  23.3835 1 393.5250! 360.8625 1  $0.9720 

Milrei      I12.7500I      917I11.6917I196.7625I180.4312I  .4860 

500  reis I  6.3750I      917I  5-8458!  98.38121  90-21561 -2430 


MINOR  COINS. 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

200  reis 

100    reis 

50    reis 

Bronze. 

40    reis 

20    reis 

10    reis 

Grams. 
15.0000 
10.0000 
7.0000 

12.0000 
7.0000 
3.5000 

j  75  per  cent  cop- 
i      per,  25  per  cent 
i      nickel. 

95  per  cent   cop- 
1      per,  4  per  cent 
[     tin,   and    i    per 
cent   zinc. 

Grains. 
[231.4853 
1  154-3235 
108.026^1 

,  185-1882 
1  108.0264 
'     54-0132 

1  To  the 
I  amount    of 
I  I  milrei. 

N  To  the 
-amount    of 
J  200  reis. 

f    $0.1092 
-!        -0546 
i       -0273 

.0218 
\       .0109 
1     .U054 

330 


SMITH'S  FINANCIAL  DICTIONARY. 


BULGARIA. 
Bulgaria  has  the  double  standard.      The  silver  coins  are  the  same  as 
those  of  France.     Foreign  gold  coins  have  been  officially  rated  as  follows : 


Levs. 

Sovereign  20.00 

20  German  marks 24.50 

20  francs 20.00 


Levs. 

Old   imperial 20.50 

Turkish    pound 22.70 

Austrian  ducat 11.60 


The  weight,  fineness,  etc.,  of  the  coins  of  Bulgaria  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value   in 

United  States 

gold  coin. 


Grams.  \  tOOOths  |  Grams.  \    Grains.        Grains. 

Alexander  (20  levs)..(  6.4516I      900I  5.8064!  99-5635    89.6071 


$3-8590 


SILVER. 


Denomination. 


W^eight. 


Fine- 
ness. 


5  levs. . . 
2  levs. . . 
I  lev. . . . 
Half  lev. 


Grains.  \  l,000ths 


25.0000 

10.0000 

5.0000 

2.5000 


900 
835 
835 
835 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained 


Value  com- 
pared   with 
silver  in 
United  States 
silver  dollar. 


Grains.  \    Grains. 
22.5OOOI385.8089 


8.3500 
4-1750 
2.0875 


154-3235 
77.1617 
38.5808 


Grains. 

347.2280 

128.8601 

64.4300 

32.2150 


$0.9352 
-3470 

•1735 
.0867 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

20   stotinki. . . 
10   stotinki... 

5    stotinki 

2,y2    stotinki.. 

Grains. 
5.0000 
4.0000 
3.0000 
2.0000 

Grains. 
77-1617 
61.7294 
46.2970 
30.8647 

$0.0385 
.0192 

.0096 

.0048 

CANADA. 

The  Dominion  of  Canada  has  the  gold  standard,  based  upon  the 
legal  value  of  the  pound  sterling,  equal  to  $4.86.65,  or  $1  equal  to 
49.316  pence.  The  country  has  no  gold  coin  of  its  own;  silver  is  legal 
tender  to  the  amount  of  $10  and  bronze  coins  to  thfe  amount  of  25  cents. 

The  value  of  the  English  coins  in  circulation  has  been  officially  fixed 
as  follows:  Crown  or  5  shillings,  $1.20;  one-half  crown  or  2  1-2  shillings, 
$0.60;  florin   or  2  shillings,  $0.48;  shilling,  $0.24;  one-half  shilling,  $0.12. 

The  weight,  fineness,  etc.,  of  the  silver  coins  of  Canada  are  as  follows : 


Denomination. 

Weight. 

Fine- 
ness. 

F'ine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 

^o-cent  oieces 

Grams. 

11.6200 
5.8100 
2.3240 
I. 1620 

l,000ths 
925 
925 
925 
925 

Grams.  \     Grains.    \    Grains. 
10.74851179-32391165-8746 
S.3742I    89.6619I    82.0-?7.'^ 

$0.4468 

2?-cent   nieces 

.2234 

lo-cent  pieces 

2.1497    -?=;.86i.7 

33-1749 
16.5874 

.0893 

5-cent  pieces 

1.0748 

17-9323 

.0446 

SMITH'S  FINANCIAL  DICTIONARY. 


331 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

British  half- 
penny   

Grams. 
5.6699 

95   per   cent    cop- 
per, 4  per  cent 
tin,   and    i    per 
cent  zinc. 

Grains. 
87.5000 

To    the 
amount    of 
I     shilling 
or  25  cents. 

$0.0101 

Also  see  Newfoundland. 


CHILE. 


Chile  has  the  gold  standard  and  the  monetary  unit  is  the  gold 
peso,  although  no  provision  is  made  for  the  minting  of  this  coin.  The 
condor  is  worth  20  pesos,  the  doubloon  10  and  the  escudo  5.  The  English 
and  Australian  pound  sterling  have  legal  circulation  in  Chile  at  the  rate  of 
13  1-3  pesos.  Gold  is  full  legal  tender.  Silver  is  legal  tender  to  the  amount 
of  50  pesos  between  individuals,  but  full  legal  tender  to  the  government. 
The  mint  is  required  to  exchange  gold  for  silver  pesos  tendered  to  it  for 
that  purpose. 

The  weight,  fineness,  etc.,  of  the  coins  of  Chile  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


I  Gratns. 

Condor    111.9820 

Doubloon    5-9910 

Escudo    2.9955 

Peso  (not  coined) . . . .  |     .5991 


l,000ths  I  Grams.       Grains.    |    Grains.    \ 

916II  10.9835  184.91151169.50221  $7.2998 

916I     5-4917I    92.4557     84.751 1 1  3.6499 

9i6f    2.74581  46.2278   42.3755I  1.8249 

9i6§|     .=;49i|     9-24551     8-4751 1  .3649 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Peso    

20  centavos 
10  centavos 
5    centavos 


1  Grams. 

l,000ths 

Gravis. 

1    Grains. 

Grains. 

20 

835 

16.7000  308.6471 

257.7203 

4 

835 

3-3400 

61.7294 

51-5440 

2 

835 

1.6700 

30.8647 

25.7720 

I 

8^=; 

-8350 

15-4323 

12.8860 

$0.6941 

.1388 

.0694 

-0347 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Copper. 

2  centavos. . .. 
T   renfnvn 

Grams. 
7.0000 
5.0000 
3.0000 

1  95  per  cent  cop- 
1      per   and   5    per 
1      cent   nickel. 

Grains. 
f  108.0264 
1     77-1617 
1     46.2970 

$0.0072 
.0036 
.0018 

Yi  centavo .... 

33^ 


SMITH'S  FINANCIAL  DICTIONARY. 


CHINA. 

The  money  of  account  in  China  is  as  follows :  lo  cash  or  li,  i 
candareen ;  lo  candareens  or  fun  or  fen,  i  mace;  lo  mace  or  tsien,  i  tael 
or  liang.  The  smallest  piece  of  money,  the  cash  or  li  (called  also  zin  and 
by  the  Dutch  pitjes),  is  represented  by  an  actual  coin,  whereas  the  canda- 
reen, the  mace  and  the  tael  are  simply  designations  for  weights  of  silver. 
The  cash  or  li  is  made  from  an  alloy  of  copper,  iron  and  tin.  It  is  a  cir- 
cular bit  of  metal  seven-eighths  of  an  inch  in  diameter  with  a  square  hole 
in  the  middle  around  which  are  impressed  on  the  obverse  Chinese  char- 
acters, stating  the  reign,  etc. ;  on  the  reverse  Mantchu  characters  stating 
the  name  of  the  mint.  Originally  it  represented  one-thousandth  part  of  a 
tael  and  nominally  it  continues  to  do  so,  but  it  long  since  ceased  to  keep 
up  a  corresponding  actual  metallic  value. 

The  monetary  unit  is  the  tael.  The  Canton  tael  in  Shanghai  is  a  quan- 
tity of  silver  of  the  fineness  of  the  Mexican  dollar  (about  0.89.8),  and 
weighing  a  tael,  which  would  make  i  money  tael  equal  $1.39.37  'ind  $100 
equal  71.7517  money  taels.  ^-\t  Shanghai  foreign  accounts  are  kept  and 
the  quotations  are  given  in  taels.  Generally,  when  converting  taels  into 
dollars,  $100  are  taken  to  equal  71.7  taels  or  i  tael  equals  $1.39.5.  Besides 
the  Canton  tael  weight  (37.573  grams)  there  is  the  haikwan  tael  or  govern- 
ment tael,  which  weighs  590.35  grains  (38.246  grams)  or  2  per  cent  more 
than  the  Canton  tael  (100  Canton  taels  equal  98  haikwan  taels).  At 
Shanghai  there  is  another  tael  weight  about  21-2  per  cent  lighter  than  the 
Canton  weight,  36.56  grams  (564.20  grains  troy).  It  is  used  as  weight  for 
gold. 

There  are  several  local  taels  at  the  various  ports  in  China  differing 
greatly  in  value  as  compared  with  the  haikwan  or  government  tael.  The  fol" 
lowing  are  the  approximate  values  at  the  treaty  ports : 


Ports. 


Amoy 

Chefoo  . . . . 
Chinkiang  . 
Foochow  . . 
Hankow  .  . . 
Hoihow  .  . . 
Ichang  .  . .  . 
Kiukiang  .  . 
Newchwang 


Local 

Haik- 

taels. 

wan 
taels. 

101.75 

100 

106.40 

100 

104.16 

100 

110.00 

100 

108.75 

100 

113.76 

100 

109.65 

100 

104.37 

100 

108.50 

100 

Ports. 


Ningpo   . 
Pakhoi    . 
Shanghai 
Swatow 
Takow    . 
Tamsui    . 
Tientsin 
Wenchow 
Wuhu   .. 


Local 
Taels. 


105.83 

110.57 
III  40 
IIO.IS 
JtOI.XI 
1 1 1.32 
105.00 
103.00 
104.16 


Haik- 
wan- 
taels. 


TOO 
100 

too 

100 
100 

too 

100 

100 
TOO 


In  large  native  transactions  ingots  of  silver  are  used.  These  are  called 
shoes  from  their  resemblance  to  a  shoe  in  shape.  They  range  in  weight 
from  a  half  tael  to  100  taels.  The  Shanghai  currency  consists  of  such 
shoes  of  silver  of  about  50  taels  weight  each.  These  ingots  are  rendered 
current  by  the  hong  koo,  who  assays  the  metal  and  affixes  to  each  ingot 
assayed  by  him  a  stamp  recording  its  touch  or  degree  of  purity.  The  hong 
koo  is  not  an  official  appointed  by  the  Chinese  government,  but  derives  his 
authority  from  an  arrangement  with  the  native  bankers.  According  to  the 
stamp  affixed  by  him  on  each  shoe  the  compradores    (native  commission 


SMITH'S  FINANCIAL  DICTIONARY.  333 

merchants  aiui  intermediaries  for  foreign  business  house's)  add  from  0  up 
to  3  tacls  Shanghai  weight  per  50  taels  of  actual  weight.  This  addition 
thus  ranges  from  0  for  silver  of  the  hong  koo's  standard  up  to  6  per  cent 
for  pure  silver  of  100  toques  or  touch.  [The  Chinese  report  the  fineness  of 
the  precious  metals  by  dividing  the  weight  into  100  parts,  called  toques  or 
touch — 98  touch  means,  accordingly,  that  the  gold  or  silver  ingot,  etc., 
contains  98  parts  of  pure  metal  and  2  parts  of  alloy].  A  further  addition 
of  2  per  cent  is  made  in  conformity  with  a  custom  of  long  standing. 

The  so-called  haikwan  (i.  e.,  customs)  sycee  (sycee  silver),  which  is 
produced  at  the  customs  bank  by  melting  and  refining  the  Mexican,  Span- 
ish and  other  foreign  dollars  received  in  payment  of  duties,  commands  a 
premium  over  the  dollar  currency  ranging  from  3  to  10  per  cent,  according 
to  the  supply  and  demand  of  the  two  commodities.  By  the  Chinese  this 
silver  is  called  wan-yin  (fine  silver),  but  in  foreign  commerce  it  is  known 
as  sycee,  which  is  the  colloquial  pronunciation  of  the  Chinese  words  se-sze, 
meaning  "fine  silk,"  and  implying  accordingly  that  the  silver  is  so  pure  that 
it  might  be  drawn  out  to  the  finest  silken  thread  wire.  Sycee  silver  means, 
therefore,  "purest  silver." 

In  exchange  on  London,  at  sight  and  four  months'  sight,  Shanghai 
receives  3s.  lod.  for  i  tael;  Paris,  sight  and  four  months'  sight,  4.90  francs 
for  I  tael ;  Germany,  four  months'  sight,  3.95  marks  for  i  tael,  and  Bombay 
and  Calcutta,  demand,  315  rupees  for  100  taels;  and  gives  New  York,  four 
months'  sight,  105  taels  for  $100;  Hongkong,  telegraphic  transfers  and  three 
days'  sight,  27  per  cent  discount,  i.  e.,  y2>  taels  for  $100;  Yokohama,  tele- 
graphic transfers  and  thirty  days'  sight,  74  taels  for  $100. 

Gold  bars  are  quoted  in  taels  currency  per  10  taels,  Shanghai  weight,  98 
touch  fine  (365.6  grams).  Silver  bars  are  quoted  in  taels  currency  per  100 
taels,  Canton  weight. 

Mexican  and  Carolus  dollars  are  quoted  in  taels  per  $100.  [The  prefer- 
ence of  the  Chinese  for  the  Carolus  (Spanish)  dollar  procures  for  that  coin 
generally  a  higher  quotation  than  that  for  the  Mexican  dollar.  The  relation 
between  these  coins  is  as  follows :  Full  weight  Carolus  dollar,  413.76 
grains  troy;  full  weight  Mexican  dollar,  416-64  grains  troy,  which,  at  6od. 
per  ounce  standard,  makes  the  Mexican  dollar  equal  4s.  2.55d.,  and  Carolus 
dollar  equal  4s.  2.09d.]. 

At  the  ports  of  Hongkong,  Canton,  Foochow  and  Amoy  accounts  are 
kept  in  dollars  and  cents. 

At  Hongkong,  Canton,  and  Foochow  chopped  dollars,  which  are  Mexi- 
can dollars  chopped  or  stamped  by  the  natives,  are  the  circulating  medium 
and  in  all  payments  it  is  the  custom  for  them  to  be  examined  and  weighed 
at  the  rate  of  717  taels.  Canton  weight,  per  $1,000.  At  Foochow  chopped 
dollars  of  the  lowest  description  pass  current,  but  at  Hongkong  and  Canton 
only  fairly  good  chopped  dollars  are  taken  at  par.  At  Amoy  accounts  are 
kept  in  currency  dollars  weighed  at  720  taels,  Canton  weight,  per  $1,000. 
Mexican  dollars  are  also  taken  at  Amoy  by  arrangement ;  not  weighed,  but 
counted.  At  these  four  ports  clean  or  unchopped  Mexican  dollars  usually 
command  a  small  premium  in  the  market  and  when  sold  at  a  premium  are 
counted  instead  of  weighed. 


324 


SMITH'S  FINANCIAL  DICTIONARY. 


The  following  are  the  approximate  average  weights  of  the  various  de- 
scriptions of  dollars  circulating  at  the  Chinese  ports : 

Grains  troy. 

Japanese  trade  dollar 400 

Japanese  yen  or  dollar 416 

Hongkong  dollar 416 

Mexican  dollar,  about 4i6j4 

Carolus  or  Spanish  dollar,  about 414 

The  Mexican  dollar  is  about  0.898  fine.  New  Mexican  dollars  weigh 
from  867  to  869  ounces  troy  per  $1,000,  according  to  where  they  have  been 
minted,  as  some  of  the  mints  issue  coins  of  fuller  weight  than  others.  The 
value  in  sterling  of  the  above  dollars  depends  upon  the  price  of  bar  silver 
in  London  and  has  ranged  in  past  years  from  3s.  6d.  to  4s.  6d.  The  Carolus 
dollar  is  about  0.894  firi^- 

Sycee  and  bar  silver  are  dealt  in  at  these  four  ports  at  a  variable  pre- 
mium, the  par  being  taken  at  717  taels.  Canton  weight,  equal  to  $1,000. 


COLOMBIA. 

The  Republic  of  Colombia  has  nominally  the  single  silver  standard, 
but  its'  currency  consists  almost  exclusively  of  paper  money,  divisional 
silver  coins  and  nickel  coins. 

The  weight,  fineness,  etc.,  of  the  coins  of  Colombia  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

Double  condor 

Condor  

Grams. 
32.2580 
16.1290 

l,000ths     Grams. 
900  29-0322 

Qoo  iA.t;i6i 

Grains.       Grains. 
497.8178  448.0360 
248.9089  224.0180 

$19.2952 
9.6476 

-r  -^ 

^ 

SILVER. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 

silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
s  Iver  dollar. 

Peso    

Gi'ams. 

25.0000 

5.0000 

2.5000 

1.2500 

l.OOOths 
900 
835 
835 
835 

Grams. 
22.5000 
4-1750 
2.0875 
1-0437 

Grains. 
385-8089 
77.1617 
38.5808 
19.2904 

Grains. 
347.2280 
64-4300 
32.2150 
16.1075 

$0-9352 
-1735 
.0867 
•0433 

2   decimos 

Decimo    

Half  decimo 

See  Korea. 


COREA. 


COSTA  RICA. 


Costa  Rica  has  the  single  gold  standard  and  the  monetary  unit  is  the 
colon.  Gold  coins  are  full  legal  tender,  silver  coins  to  the  amount  of  10 
colons  and  copper  coins  to  the  amount  of  i  colon. 

The  weight,  fineness,  etc.,  of  the  coins  of  Costa  Rica  are  as  follows : 


SMITH'S  FINANCIAL  DICTIONARY. 


335 


GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20    colons 

Grams. 

15.5600 
7.7800 
3.8900 
1-5560 

l,000ths 
900 
900 
900 
900 

Grams. 

14.0040 
7.0020 
3-5010 
1 .4004 

Grains. 

240.1274 

120.0637 

60.0318 

24.0127 

Grains. 

216.1147 

108.0573 

54.0286 

2I.6114 

$9.3072 

10    colons 

4-6536 

t;    colons 

2.3268 

2  colons 

-9307 

The  value  of  the  silver  coins  is  as  follows : 
50  centimes  equal  to  one-half  colon,  or  $0.23267627. 
25  centimes  equal  to  one-fourth  colon,  or  $0.11633813. 
10  centimes  eoual  to  one-tentii  colon,  or  $0.04653525. 
5  centimes  eaual  to  ene-tvi'entieth  colon,  or  $0.02326762. 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Vak:e. 

Copper. 
I  centimo 

Grams. 
2.5000 

75  per  cent   cop- 
per and  25  per 
cent  nickel. 

Grains. 
34.7228 

$0.0046 

CUBA. 

The  monetary  system  of  Cuba  is  the  same  as  that  of  Spain.  Ac- 
counts are  kept,  however,  in  piasters  of  8  reals  of  10  cuartos  each.  The 
metallic  circulation  is  composed  chiefly  of  the  geld  coins  mentioned  below 
and  of  the  piasters  of  Spain  and  its  subdivisions ;  of  Mexican  pesos  and 
American  dollars. 

The  weight,  fineness,  etc.,  of  the  principal  geld  coins  in  circulation  in 
Cuba  are  as  follows  : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

Spanish  quadruple 
f enza)  

Grams. 

27.0643 
8.3871 
8.0645 

l,000ths 

875 
900 
900 

Grams. 

23.6812 

7-5483 
7.2580 

Grains. 

417.6659 
129.4327 

124-4543 

Grains. 

365-4576 
116.4894 
112.0089 

$15-7389 
5-0167 
4-8238 

Doubloon  Isabella  .... 

Alphonse   (25  pesetas) 

MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

10  centimes. . 
5   centimes... 
2  centimes. . . 
I   centimo.  . .  . 

Grams. 
10.0000 

5.0000 

2.0000 
1. 0000 

95  per  cent   cep- 
1      per,  4  per  cent 
r     tin,   and    I    per 
J      cent  zinc. 

Grains. 

f  154-3235 
77.1617 
30.8647 

[    154323 

To  the 
amount    of 
5  pesetas. 

$0.0192 
.0096 
.0038 
.0019 

336 


SMITH'S  FINANCIAL  DICTIONARY. 


DENMARK. 

For   general   information   as   to   the   money  of  Denmark   see    Scandi- 
navian Union,  The. 

The  weight,  fineness,  etc.,  of  the  coins  of  Denmark  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  crowns 

Grams. 

8.9606 

4.4803 

2.2415 

l,000ths 
900 
900 
900 

Grams. 
8.0645 
4.0322 
2.O161 

Grains. 

138-2831 

69.1415 

34-5707 

Grains. 

124.4548 

62.2274 

3I-II37 

- 

$5-3598 

2.6799 

1-3389 

lo  crowns 

5  crowns 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared with 

silver  in 
United  States 
silver  dollar. 


2  crowns 
I  crown . 
50  ore.  . . 
40  ore . '. 
25  ore. . . 
10  ore.  . . 


1  Grains. 

l,000ths 

Grams. 

15.0000 

800 

12.0000 

7.5000 

800 

6.0000 

5.0000 

600 

3.0000 

4.0000 

600 

2.4000 

2.4200 

600 

1.4520 

1.4500 

400 

.5800 

Grains. 

231-4853 

115.7426 

77.1617 

61.7294 

37-3463 
22.3769 


Grains. 
185.1882 

92-5941 
46.2970 

37-0376 

22.4077 

8.9507 


$0.4988 
.2494 
.1247 

.0997 
•0603 
.0241 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

5  ore 

2  ore 

Grams. 
8.0000 
4.0000 
2.0000 

1  95   per  cent  cop- 
per, 4  per  cent 
tin,   and    i    per 
cent  zinc. 

Grains. 
[123.4588 
.     61.7294 
[   30.8647 

To  the 
amount    of 
j  I  crown. 

$0.0133 
.ooc^ 

I   ore 

1     .0026 

ECUADOR. 
Ecuador  has  the  single  silver  standard  and  the  monetary  unit  is  tlje 
Sucre  or  peso. 

The  weight,  fineness,  etc.,  of  the  coins  of  Ecuador  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


10  sucres. 


Grams.  \  l,000ths  |    Grams.  \     Grains.    \    Grains.    \ 

8.I360I        9O0I    7.3224!  125.55761  II3.OO18I  $4.8665 


SILVER. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 

silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 

Sucre    

Grams. 
25.0000 
5.0000 
2.5000 
1.2500 

l.OOOths 
900 
900 
900 
900 

Grams. 
22.5000 
4.5000 
2.2500 
1.1250 

(rrains. 
385-8089 
77.1617 
38.5808 
19.2904 

Grains. 
347.2280 

69.44  =;6 

34.7228 
17.3614 

$0.9352 
.1870 

-0935 
.0467 

Peseta,  or  20  cents. . . . 

Real,  or  10  cents 

Medio-real,  or  5  cents. 

SMITH'S  FINANCIAL  DICTIONARY. 


337 


EGYPT. 

Egypt  has  the  single  gold  standard.  Silver  is  legal  tender  to  the 
amount  of  200  piasters,  or  about  $10,  in  any  one  payment.  Nickel  and 
bronze  coins  are  legal  tender  to  the  amount  of  10  piasters,  or  about  50 
cents.  Payments  in  Egypt  are  generally  made  in  foreign  gold  pieces,  offi- 
cially rated  by  the  government  as  follows  : 

Piasters. 

Pound  sterling 97-5° 

Turkish   pound 87.75 

Old  Russian  imperial 7945 

20-franc   piece 77-15 

Austrian  sequin 45'92 

The  rates  given  the  sequin  and  the  imperial  are  nominal  as  these  pieces 
do  not  circulate.  The  German  gold  coins  are  not  rated,  but  are  valued  as 
follows:  Twenty-mark  pieces,  95.5  piasters;  lo-mark  pieces,  47-75  piasters. 
Silver  coins,  such  as  the  Maria  Theresa  thaler,  5-franc  piece,  etc.,  are  no 
longer  received  in  the  public  treasuries,  which  accept  no  coins  but  English 
sovereigns,  20-franc  pieces  and  Turkish  pounds. 

The  weight,  fineness,  etc.,  of  the  coins  of  Egypt  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

1  Grains. 

Egyptian  pound |  8.5000 

50  piasters 1  4-2500 

l,000ths  1  Grains.  \    Grains.    |    Grains.    \ 

875     7-4375131-1750114-7881                  $49430 
875     3-7187     65.5875     57-3890                    2.4715 

SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 

silver  in 
United  States 
silver  dollar. 


20  piasters. 
10  piasters. 
5  piasters.  . 
2  piasters. . 
Piaster     .  . . 


Grains. 
28.0000 
14.0000 
7.0000 
2.8000 
1.4000 


l,000ths 

833^3 
833* 
833^ 
833^ 
833^ 


Grams.  \    Grains. 
23-3333  432.1059 
216.0529 


11.6666 

5-8333 
2.3333 


108.0264 
43.2105 


1.1666I  21.6052 


Grains. 
360.0883 
180.0441 
90.0220 
36.0088 
18.0044 


$0.9699 

-4849 
.2424 
.0969 
.0488 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

•Weight. 

Legal  tender. 

Value. 

Nickel. 

Grains. 

Grains. 

5  ochr-el- 

guerche    . . . 

4.0000 

75   per  cent  cop- 

[    61.7294 

f  $0.0247 

2  ochr-el- 

guerche    . . . 

2.0000 

r     per  and  25  per 
1      cent  nickel. 

!  30.8647 

.0098 

I   ochr-el- 

To  the 
amount    of 

guerche    . . . 

1.7500 

) 

i  27.0066 

.0049 

Bronze. 

10  piasters. 

Yz  ochr-el- 

1 95  per  cent  cop- 

1 

guerche   . . . 

3-3333 

1      per,  4  per  cent 

;   51-4406 

.0024 

"%.   ochr-el- 

\     tin,   and    i    per 

( 

gucrche    .  . . 

2.0000 

1      cent   zinc. 

30.8647 

J 

1       .0012 

33S 


SMITH'S  FINANCIAL  DICTIONARY. 


FINLAND. 
Finland  has  the  single  gold  standard,  with  the  markkaa  (equal  to  the 
franc)  as  the  monetary  unit. 

The  weight,  fineness,  etc.,  of  the  coins  of  Finland  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

P^r|              Value  in 
£•!            United  States 

tahfed.           g°l^  ^°i"- 

20  markkaa 

lo  markkaa 

Grams.  |  l.OOOths     Grams.  ;    Grains. 
6.4520         900     5.8068I    99-5695 
3.2260         QOO     2.00-?aI    4Q.78A7 

Grains. 

89.6126 

44.8063 

$3-8592 
1.9296 

-^ 

^      *^^ 

t  ^     1            If 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Piire 
silver 

con- 
tained. 


Value  com- 
pared with 

silver  in 
United  States 
silver  dollar. 


2  markkaa 
I  markkaa 
50  penni .  . . 
25    penni.  . 


Grams. 

10.3650 
5-1825 
2.5490 

1-2745 


l,000ths  I  Grams.  \    Grains.     \    Grains. 

8681  8.9968  159-9562I  138.8421 
868|  4.4984I  79.9781  69.4210 
750I  1.9117!  39-33701  29.5028 
750I  0.9558I  19.6685 1  14.7514 


$0.3739 
.1869 
.0794 
•0397 


MINOR  COINS 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze   . 

10   penni 

5    penni 

I    penni 

Grams. 
12.7968 

6.3984 
1.2796 

Grains. 
197.4847 

98.7423 
19.7484 

To      the 

amount    of 

[l  markkaa. 

$0.0192 
.0096 
.0019 

FRANCE. 

For  general  information  as  to  the  money  of  France  see  Latin  Union, 


Th 


e. 


The  weight,  fineness,  etc.,  of  the  coins  of  France  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


100  francs. 
50  francs. . 
20  francs. . 
10  francs. . 
5    francs. . 


Grams.  \  i,000ths  I  Grams.  I    Grains.    |    Grains. 


32.2580 1 

16.I290I 

6.45161 

3-2258I 

I.6129I 


9OOI29.O322  497.8178 


9OOJ14.5161 
900!  5.8064 
9001  2.9032 
9OOI    I.4516 


248.9089 
99-5635 
49.7817 
24.8908 


448.0360 

224.0180 

89.6072 

44.8036 

22.4O18I 


$19.2952 
9-6476 
3-8590 

1-9295 
.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Grams.  I 

25.0000 1 

10.0000! 

5.OOO0I 

2.5000! 

20   centimes I   i.ooool 


5  francs. . . . 
2  francs .... 
I  franc  .... 
50   centimes. 


l,000ths  !  Grams.  I  Grains.  I  Grains. 
9O0I22.5OO0I383.8089I347.2280 
835]  8.35OOI  154.3235  128.8601 
83=^1  4. 1 750 1  77-1617  64.4300 
835 1  2.0875!  38.5808  32.2150 
835I    O.8350I    I5.4323I    I2.8860I 


$0.9352 
•3470 
•1735 
.0867 
•0347 


SMITH'S  FINANCIAL  DICTIONARY. 


339 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

10  centimes. .. 
5  centimes.. . . 
2  centimes.. .  . 
I  centime 

Grajns. 

10.0000 

5.0000 

2.0000 

1. 0000 

1 95  per  cent  cop- 
per, 4  per  cent 
tin,   and    i    per 

i      cent  zinc. 

Grains. 
{  154-3235 
77-1617 
30.8647 

1     15-4323 

To      the 
1  amount  of 
\S  francs. 

1 

$0.0192 
.0096 
.0038 
.0019 

GERMANY. 

The  standard  of  the  German  Empire  is  gold  monometallic  and  the 
monetary  unit  is  the  mark  of  100  pfennigs.  Silver  is  legal  tender  to  the 
amount  of  20  marks.  All  silver  coins  are  exchangeable  for  gold  at  the  public 
treasuries. 

The  weight,  fineness,  etc.,  of  the  coins  of  Germany  are  as  follows : 


GOLD. 

Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

Double     crown     (20 
marks)   

Grams.     l.OOOths 

7.9649         900 
3.9824         900 

Grams. 

7.1684 
3.5842 

Grains.         Grains.    \ 

122.9177  110.6260                   $4.7642 
61.4588     55-3130                      2,3821 

Crown  (10  marks)  .... 

SILVER. 

Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


I  Grams. 

5  marks \^l-'?'7'n 

2  marks ii.iiii 

Mark   5-5555 

SO    pfennigs |  2..'/TJ^ 

Thaler I18.5185 


1  l,000ths 

Grams. 

Graitis.    \     Grains. 

900 

25.0000 

428.67^5  385.8089 

900 

10.0000 

171.4706  154.3235 

900 

5.0000 

85-7353     77-1617 

900 

2-5000 

42.8676     38.5808 

900 

16.6666 

285.7840  257.2056 

$1.0392 
.4156 
.2078 
.1039 
.6928 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 
10    pfennigs.  . 

Grams. 
4.0000 

1  75  pet"  cent   cop- 

Grains. 
\    61,7294 

1 

$0.0238 

5    pfennigs . .  . 

2.5000 

1      per  and  25  per 
cent  nickel. 

[    38-5808 

1 

.0119 

Bronze. 

To       the 
i  amount    of 

1 

2    pfennigs .  .• . 

3-3333 

[  95    per  cent  cop- 

1     51-4406 

I  mark. 

.0047 

I    pfennig.  . .  . 

2.0000 

1     per,  4  ner  cent 
tin,   and    i    per 
[     cent   zinc. 

1     30.8647 

1 

.0023 

1 

340 


SMITH'S  FINANCIAL  DICTIONARY. 


GREAT  BRITAIN  (AND  COLONIES). 

The  single  gold  standard  was  definitely  adopted  in  England  by  the 
act  of  Parliament  passed  June  22,  1816.  The  sovereign  or  pound  ster- 
ling ife  the  monetary  unit.  The  legal  gold  coins  of  Great  Britain  are 
the  sovereign,  half-sovereign,  2-sovereign  and  5-sovereign  pieces.  The 
gold  coins  in  circulation  consist  of  sovereigns  and  half-sovereigns.  The 
silver  coins  are  the  crown,  double  florin  (no  longer  issued),  half-crown, 
florin,  shilling,  6  pence  and  3  pence  pieces.  The  silver  coins  of  Great 
Britain  are  a  legal  tender  for  40s.,  or  £2 — equal  to  $9.73.2  in  United 
States  money.  The  present  legal  ratio  between  gold  and  silver  in  the  coin- 
age of  Great  Britain  is  as  i  to  14.28781. 

Individuals  have  the  right  to  deposit  gold  at  the  royal  mint  for  coinage 
and  receive  in  return  therefor  £3  17s.  10  i-2d.  per  ounce  of  standard  gold 
(916  2-3  in  English  standard)  under  the  law,  but  as  a  matter  of  fact  since 
1844  the  Bank  of  England  has  been  the  only  depositor  of  gold  at  the  royal 
mint.  The  charter  of  the  bank  makes  it  obligatory  upon  the  bank  to  receive 
all  gold  brought  to  it  by  the  public  and  to  pay  for  it  immediately  at  the  rate 
of  £13  17s.  9d.  per  ounce,  standard.  The  diflference  of  i  i-2d.  compensates  the 
bank  for  the  loss  of  interest  between  the  date  of  the  deposit  of  the  gold  at 
the  mint  and  the  date  it  receives  the  same  back  in  the  form  of  coin. 

The  English  colonies  of  Malta,  Gibraltar,  the  Cape  of  Good  Hope, 
Natal,  the  Australian  colonies  and  New  Zealand  have  the  same  monetary 
system  as  in  England.  In  Canada,  however,  the  gold  dollar  of  the  United 
States  is  the  monetary  unit  and  the  pound  sterling  or  sovereign  is  a  legal 
tender  at  the  rate  of  $4.86.6-  In  the  settlements  of  the  Straits  of  Malacca  and 
Hongkong  the  single  silver  standard  prevails,  the  British  dollar  (coined  in 
pursuance  of  the  British  dollar  order,  1895),  the  Hongkong  and  the  Mexi- 
can dollar  being  legal  tender  for  the  payment  of  all  sums  in  these  colonies. 

The  weight,  fineness,  etc.,  of  the  coins  of  Great  Britain  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


5  pounds 

2  pounds 

Sovereign    .... 
Half    sovereign 


Graifis. 
39.9402 
15.9761 

7.9880 

3-9940 


l,000ths  I  Grants.  \  Grains.  \ 
916II36.6119I616.3723 
916^114.64471246.5489 

9i6§|  7.3223 1 123.2744 
9i6§|  3.661 1 1  61.6372 


Grains.     \ 
565.0079' 
226.0031 
1 13.0015 

56.5007 


$24-3328 

9-7331 
4-8665 
2-4332 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared  with 

silver  in 
United  States 
silver  dollar. 


Grams.  \ 

Crown   28.2759 

Half  crown 14.1379 

Florin  11.3103 

Shilling    5-6551 

Sixpence   2.8275 

Fourpence    1.8850 

Threepence   I-4I37 

Twopence    (     .9425 

Penny    |     .4712 


i,000ths  I 
925 
925 
925 
925 
925 
925 
925 
92s 
025 


Grams. 

26.1552 

13.0776 

10.4620 

5-2310 

2-6155 

1.8850 

1.3077 

.8718 

•4359 


Grains.   \ 

436.3637 
218.1818 

I74-.S4S5 
87.2727 

43-6363 
29.0909 
21.8181 

14-5454 
7.2727 


Grains. 

403-6364 
201.8182 

161-4545 
80.7272 
40.3636 
26.9090 
20.1818 

13-4545 
6.7272 


$1.0872 
-5436 
•4348 
-2174 
.1087 
.0724 

•0543 
.0362 
.0181 


SMITH'S  FINANCIAL  DICTIONARY. 


341 


MINOR  COINS 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

I    penny 

Halfpenny  . . . 
Farthing   .... 

Grams. 
9.4498 
5-6699 
2.8349 

1  95  per   cent  cop- 
per, 4  per  cent 
tin,   and    i    per 
cent  zinc. 

Grains. 

145-8333 
87.5000 

I    43-7500 

To       the 
amount    of 
I  shilling. 

$0.0202 
.0101 

.0050 

The. 


GREECE. 

For  general  information  a.s  to  the  money  of  Greece  see  Latin  Union, 

The  weight,  fineness,  etc.,  of  the  coins  of  Greece  are  as  follows : 


GOLD. 


Denomination, 

1 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

100  drachmas 

Grams. 
32.2580 
16.1290 
6.4516 
3-2258 
I.6129 

l.OOOths 
900 
900 
900 
900 
900 

Grains. 
29.0322 

I4.5161 
S.8064 
2.9032 

i.45i'6 

Grains.    | 
497.8178 
248.9089 
99-5635 
49.7817 
24.8908 

Grains. 
448.0360 
224.0180 
89.6072 
44.8036 
22.4018 

$19-2952 
9.6476 
38590 
1.9295 

•9647 

50  drachmas. 

20  drachmas 

10  drachmas 

5     drachmas 

SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


5  drachmas 
2  drachmas 
I  drachma. 
50  lepta. . . 
20   lepta. . . 


Grams. 

l,000ths 

Grams. 

Graijis.    \ 

Grains,    j 

25.0000 

900 

32.5000 

385-8089 

347.2280 

10.0000 

835 

8.3500 

154-3235 

128.8601 

5.0000 

835 

4-1750 

77-1617 

64  4300 

2.5000 

835 

2.0875 

38.5808 

32.2150 

1. 0000 

835 

0.8350 

15-4323 

12.8860 

$0.9352 
-3470 

-1735 
.0867 
-0347 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

Grams. 

Grains 

20  lepta 

4.0000 

75  per  cent  cop- 

61.7294 

[$0.0385 

10  lepta 

3.0000 

per  and  25  per 

46.2970 

.0192 

5  lepta 

2.0000 

cent  nickel. 

I    30.8647 

.0096 

Bronze. 

To       the 
amount    of 

I 
'1 

2  lepta 

2.0000 

95   per  cent  cop- 

f   30.86.17 

5  francs. 

I  lepton 

1. 0000 

per,  4  per  cent 

15-4323 

.0038 

tin,   and    i    per 

.00 1 9 

cent  zinc. 

1 

342 


SMITH'S  FINANCIAL  DICTIONARY. 


GUATEMALA. 
Accounts  in  Guatemala  are  kept  in  the  silver  peso  or  piaster. 
The  weight,  fineness,  etc.,  of  the  coins  in  use  in  Guatemala  are  as  fol- 
lows : 


GOLD. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 


Onza  or  doubloon 

Half  onza 

20  pesos 

10  pesos 

5    pesos 

2  pesos 

I  peso 


Grams, 

■  l.OOUths 

Grams. 

Grahis. 

Grains.    \ 

27.0643 

875 

23.6812 

417.6659 

365.4576 

13-5.321 

H75 

11.8406 

208.8329 

182.728S 

32.2580 

900 

29.0322 

497.8169 

448.0352 

16.1290 

900 

I4.5161 

248.9084 

224.0176 

8.0645 

900     7.2580 

124.4542 

112.0088 

3-2258 

900 

2.9032 

49.7816 

44-8035 

1. 6129 

900 

1-4516 

24.8908 

22.4017 

$15.7.389 
7.8694 
19.2952 
9.6476 
4-8238 
1.9295 
.9647 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value  com- 
pared with 

silver  in 
United  States 
silver  dollar. 


Peso    

Half  peso.  . . 
Quarter  peso 

Dime 

Half  dime   . . 
I    peso 


Grams. 
25.0000 

12.5000 
6.2500 
2.5000 
1.2500 
1. 6129 


l,000ths 
900 
900 
900 
835 
835 
900 


Grams.  \     Grains.    \    Grains. 
22.5000 


11.2500 
5.6250 
2.0875 

1.0437 
I.4516 


385.8089I347.2280I 

192.9044  1 73.6140I 

96.4522 1    86.8070I 


38.5808 
19.2904 
24.8908 


32.2I50I 
16.IO75I 

22.401 7 1 


$0.9352 
.4676 
■2338 
.0867 
•0433 
.9647 


MINOR  COINS. 

Denomination. 

.  Weight. 

Composition. 

W^eight. 

Legal  tender. 

Value. 

Copper. 
I   centimo. . . . 

Grams. 
2.50000 

75  per  cent  cop- 
per and  25  per 
cent  nickel. 

Grains. 
34.7228 

$0.0100 

HAITI. 

The  money  of  account  in  Haiti  is  the  gourde  of  100  cents.  The 
actual  currency  is  irredeemable  paper.  The  metallic  gourdes  have  disap- 
peared entirely  from  circulation,  being  hoarded.  Only  the  divisional  coins 
are  found  in  circulation,  but  these  frequently  command  a  premium  of  from 
I  to  2  per  cent.  Many  United  States  gold  pieces  are  used,  owing  to  the  fact 
that  export  duties  have  to  be  paid  in  gold. 

The  weight,  fineness,  etc.,  of  the  coins  of  Haiti  are  as  follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


ID  gourdes 
5  gourdes. 
2  gourdes. 
Gourde  .  . 


Grants. 
16.1290 

8.0645 
3.2258 
I.6129 


l.OOUths 
900 
900 
900 
900 


Grams. 
14.5161 
7.2580 
2.9032 
I.4516 


Grains. 

248.9084 

124.4542 

49.7816 

24.8908 


Grains. 
224.0176 
112.0088 

44.8035 
22.4017 


$9.6476 
4.8238 

1.9295 
.9647 


SMITH'S  FINANCIAL  DICTIONARY. 


343 


SILVER. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 

silver  in 
United  States 
silver  dollar. 

Gourde    

Half  courde 

Grams. 

25.0000 

12.5000 

5.0000 

2.5000 

l,000ths 

goo 

835 

Grams.  \    Grahts.         Grains. 
22. 5000 1 38 5. 8089  347.2280 
10.4375 llQ2.Q0zLd.  l6l.07=;2 

$0.9352 
-4338 

Fifth    gourde 

Tenth  gourde 

835 
835 

4-1750 

2.0875I 

77.1617 
38.5808 

64.4300 
32.2150 

•1735 
.0867 

MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

2  centimes 

I  centime 

Grams. 

10.0000 

5.0000 

95   per  cent  cop- 
per, 4  per  cent 
1     pewter,    and    i 
i,     per  cent  zinc. 

Grains. 
1  154-3235 

iTo       the 
i  amount    of 
<2  gourdes. 

J 

f  $0.01 92 

j       .0096 

See  Netherlands,  The. 


HOLLAND. 


HONDURAS. 


Accounts  in  Honduras  are  kept  in  the  silver  peso  or  piaster. 

The  weight,  fineness,  etc.,  of  the  coins  in  use  in  Honduras  are  as  fol- 


lows 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


Onza  or  doubloon 

Half  onza 

20  pesos 

10  pesos 

5  pesos 

2  pesos 

I  peso 


Grams. 

27.0643 

13-5321 

32.2580 

16.1290 

8.0645 

3-2258 

I.6129 


l.OOOths 
875I 
875 
900 
900 
900 
900 
900 


Grains. 

23.6812 

11.8406 

29.0322 

I4.5161 

^2^80 

2.9032 

I.4516 


Grains. 
417.6659 
208.8329 
497.8169 
248.9084 
124.4542 
49.7816 
24.8908 


Grains. 
365.4576 
182.7288 
448.0352 
224.0176 
112.0088 

44-8035 
22.4017 


$15-7389 
7.8694 
19.2952 
9.6476 
4-8238 
1-9295 
-9647 


SILVER. 


D  enomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Peso    

Half  peso.  . . 
Quarter    peso 

Dime 

Half  dime.  . . 


Grains. 
25.0000 
12.5000 
6.2500 
2.5000 
1.2500 


l.OOOths  i  Grams.  \    Grains. 


900 
900 
900 
835 
835 


22.5OOOI385.8089 

11.2500  192.9044 

5.6250  96.4522 

2.0875  38.5808 

1.0437  19-2904 


I  Grains. 

347.2280 

173.6140 

86.8070 

32.2150 

16.1075 


$0-9352 
.4676 
-2338 
.0867 
-0433 


344 


SMITH'S  FINANCIAL  DICTIONARY. 


MINOR  COINS. 

Denomination. 

Weight. 

Composition. 

Weiglit. 

Legal  tender. 

Value. 

I  centimo 

Grains. 
2.5000 

75   per   cent  cop- 
per and  25  per 
cent  nickel. 

Grains. 

$0.0100 

HUNGARY. 

See  Austria-Hungary. 

INDIA  (BRITISH). 

The  monetary  standard  is  gold  and  the  unit  is  the  sovereign.  The 
government  undertakes  to  receive  from  the  public  gold  in  exchange  for 
rupees  and  rupees  in  exchange  for  gold  at  the  rate  of  15  rupees  to  the 
sovereign.  Rupees  and  half  rupees  remain  full  legal  tender  in  payment 
or  on  account,  side  by  side  with  the  sovereign,  at  the  rate  of  15  rupees 
to  the  sovereign.  The  coinage  of  the  gold  mohur  gradually  declined  with  the 
iinportation  of  gold  bars  bearing  recognized  marks  and  for  many  years  the 
few  mohurs  which  have  been  coined  have  been  struck  as  specimens.  In  the 
future  these  coins  will  not  enter  into  circulation  or  be  a  part  of  the  Indian 
monetary  system. 

The  weight,  fineness,  etc.,  of  the  coins  of  British  India  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

,  Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

Sovereia'n    

Grains. 
7.9880 

3-9940 

l,O00ths 

gi6| 
9i6§ 

Grams.  |    Grains. 
7.^22^1 1 2'^.274i. 

Grains. 
1 13.0015 
56.5007 

$4-8665 

Half  sovereign 

3.661 1 

61.6372 

2.4332 

SILVER. 


Penomination. 


Rupee    

Half  rupee... 
Quarter  rupee 
Eighth   rupee. 


Weight. 


Grams. 

1 1 .6640 
5.8320 
2.9160 
1.4580 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


i,000ths 
916I 

9i6f 
916I 
9165 


Grams. 

10.6920 
5-3460 
2.6730 

1-3365 


Grains. 
180.0030 
90.0015 
45.0007 
22.5003 


Grains. 
165.0027 
82.5013 
41.2506 
20.6253 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


$0.4444 
.2222 
.1111 

■0555 


MINOR  COINS. 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Copper. 
2    pice    or    J/2 

Gravis. 
12.9598 
6.4799 

3-2399 
2. 1 599 

Grains. 
200.0000 
100.0000 
50.0000 

33-333^ 

j 

To       the 
I  amount    of 
I  rupee. 

r 
$0.0101 

;     .0050 

.0025 

.0016 

anna   

I    pice    or    Ya 

anna   

Yi   pice  or  Yz 

anna   

I    pie  or   1-12 

anna  

SMITH'S  FINANCIAL  DICTIONARY. 


345 


ITALY. 

For  general  information  as  to  the  money  of  Italy  see  Latin  Union,  The. 
The  weight,  fineness,  etc-,  of  the  coins  of  Italy  are  as  follows : 

GOLD. 

Value  in 
Denomination.  Weight,    ^"i^       f..'";"       Weight.        ^"j."  United  States 

gold  coin. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

100  lire 
50  lire 
20  lire 
10    lire 

5      lire 


Gr.iins. 

l.OOOths 

Grams. 

Grains.    \ 

Grains. 

32.2580 

900 

29.0322497.8178 

448.0360 

16.1290 

900 

14-5161 

248.9089 

224.0180 

6.4516 

900 

5-8064 

99-5635 

89.6072 

3-2258 

900 

2.9032 

49.7817 

44-8036 

I.6129 

900 

1.4516 

24.8908 

22.4018 

$19-2952 

9.6476 

3-8590 

1-9295 

.9647 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


5  lire 

2  lire 

I   lira 

50  centesimi 
20  centesimi 


Grams. 

l.OOOths 

Grams. 

Grains. 

Grains. 

25.0000 

900 

22.5000 

385.8089 

2,^'7.2'2^0 

10.0000 

835 

8.3500 

154-3235 

128.8601 

5.0000 

835 

4-1750 

77-1617 

64.4300 

2.5000 

835 

2.0875 

•^8.5808 

32.2150 

1. 0000 

835 

0.8350 

15-4323 

12.8860 

$0-9352 
.3470 

•1735 
.0867 

•0347 


MINOR  COINS 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 
20  centesimi. . 

Bronze. 

10   centesimi.. 
5   centesimi.. . 
2   centesimi... 
I    centesimo. . 

Grams. 
4.0000 

10.0000 
5.0000 
2.0000 
1. 0000 

75   per  cent  cop- 
per and  25  per 
cent  nickel. 

1  96  per  cent   cop- 
\      per   and   4   per 
i      cent  tin. 

J 

Grams. 
61.7294 

n  54. 323=; 
i  77.1617 
1  30.8647 
^  15.4^23 

To       the 
amount    of 
5  francs. 

iTo       the 
\  amount    of 
j  each   oiece. 

J 

$0.0385 

[      .0192 
;     .0096 
i     .0038 
i     .0019 

JAPAN. 

Japan  has  the  single  gold  standard  and  the  unit  is  the  yen.  The 
unit  is  not  coined.  The  hundredth  part  of  a  yen  is  a  sen  and  the  tenth 
part  of  a  sen  ->  rin.  The  gold  coins  are  full  legal  tender;  silver  coins  are 
legal  tender  to  the  amount  of  10  yen,  and  nickel  and  copper  coins  to  the 
amount  of  i  yen. 

In  September,  1879,  the  Japanese  silver  yen  of  416  grains,  .900  fine, 
was  declared  by  the  government  to  be  a  legal  tender,  to  be  received  and  paid 
on  a  par  with  the  Mexican  dollar  and  to  be  accepted  at  the  government 
offices  in  payment  of  customs  dues,  land  rents,  etc.  The  foreign  banks  and 
the  mercantile  community  have  recognized  this  action  on  the  part  of  the 


346 


SMITH'S  FINANCIAL  DICTIONARY. 


government  and  this  silver  yen  of  416  grains  is,  in  fact,  the  present  mone- 
tary unit  and  it  has  virtually  supplanted  the  Mexican  dollar. 

Trade  among  the  Japanese  is  carried  on  to  a  large  extent  in  a  govern- 
ment paper  money  which  is  inconvertible  but  stands  at  par.  This  paper 
is  styled  kinsatsu. 

The  weight,  fineness,  etc.,  of  the  coins  of  Japan  are  as  follows : 


GOLD. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 


20    yen 

10    yen 

5    yen 

Yen  (not  coined) 


Grants.  I  l.OOOths  I  Grams. 
16.66651        90014.9998 

8.3333 1      90o(  7-4999 

4.1666I      900I  3-7499 

-8333 1      900 1     .7499 


G^'ains.     \    Grains. 

2s7.2033l231.4830 

128.6024I  1 15.7422 

64.3004I  57-8704 

1 2.8602 1  11.5742 


$9.9691 

4-9845 

2.4922 

.4984 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness, 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


I  Grams. 

50  sen |i3-4783 

20  sen I  5-3914 

10  sen 1  2.6955 


l,U00ths 
800 
800 
800 


Grams. 
10.7826 

A.313I 
2.1564 


Grahis.    \    Grains. 
208.OOI9I  166.4015 
83.20201    66.5616 

41-59791  33-2783 


$0.4482 
.1792 
.0896 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  Tender. 

Value. 

Nickel. 
5    sen 

Bronze. 

I    sen 

c   rin 

Grains. 

4-6654 

7.1280 
3-5640 

75  per  cent  cop- 
per and  25  per 
cent  nickel. 

[95   per  cent  cop- 
J     per,  4  per  cent 
i     tin,   and   i    per 
[     cent  zinc. 

Grains. 
71.9981 

1 

i  110.0018 
i   55.0009 

) 

r  • 

To       the 
.  amount    of 
I  yen. 

r  $0.0245 

- 

.0049 
.0024 

KOREA. 

The  unit  of  value  in  Korea  is  the  silver  Hang,  equal  to  20  Japanese 
sen  and  equal  to  9.96  United  States  cents.  There  is  a  S-liang  piece,  or  dollar, 
so-called,  equal  to  the  Japanese  yen,  which  is  equal  to  49-^4  United  States 
cents. 

LATIN    UNION,    THE    (BELGIUM,    FRANCE,    GREECE,    ITALY, 

SWITZERLAND). 

The  Latin  Union  has  the  double  standard  and  the  ratio  of  gold  to  silver 
of  I  to  15  1-2.     The  coinage  of  gold  is  unlimited  and  the  coinage  of  silver 


SMITH'S  FINANCIAL  DICTIONARY. 


347 


suspended.  Gold  coins  and  the  5-franc  silver  piece  are  unlimited  legal 
tender. 

The  franc  is  known  as  the  lira  in  Italy  and  as  the  drachma  in  Greece. 
The  centime  is  called  the  ccntesimo  (plural  centesimi)  in  Italy  and  the 
lepton  (plural  lepta)  in  Greece.  The  silver  coins  of  less  than  five  francs 
are  legal  tender  between  individuals  to  the  amount  of  50  francs  and  are  re- 
ceivable by  the  state  to  the  amount  of  100  francs  in  single  payments. 

The  convention  now  in  force  is  dated  November  6,  1885.  By  its  terms 
the  suspension  of  the  coinage  of  the  5-franc  silver  piece  is  maintained  in  the 
countries  of  the  union,  but  any  of  the  contracting  states  may  resume  the 
free  coinage  of  silver  on  condition  of  exchanging,  during  the  entire  duration 
of  the  convention,  the  5-franc  silver  pieces  bearing  its  stamp  and  circulating 
in  the  other  states  of  the  union  for  gold  on  demand.  The  latter,  however, 
would  then  be  at  liberty  not  to  receive  the  5-franc  silver  pieces  of  the  state 
that  resumed  the  free  coinage  of  the  white  metal.  It  was  likewise  stipu- 
lated in  the  convention  of  1885  that  the  coins  of  each  of  the  signatory 
powers  should  be  received  by  the  treasuries  of  the  others  as  well  as  by  the 
banks  of  France  and  Belgium  and  that  the  union  might  be  terminated  any 
time  after  January  i,  1891,  by  giving  one  year's  notice. 

The  weight,  fineness,  etc.,  of  the  coins  of  the  Latin  Union  are  as  fol- 
lows : 

GOLD. 


Denomination. 


Weig-ht. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value   in 

United  States 

gold  coin. 


100  francs 
50  francs. 
20  francs. 
10  francs . 
5  francs. . 


Grams. 
32.2580 
16.1290 
6.4516 
3-2258 
I.6129 


l,000ths  I  Grams.  |     Graitts.    \     Grains. 
9O0I29.O322I497.8178I448.O360 
9OOI14.5161I248.9089I224.O18O 
9OOI    5.8064I    99-56351    89-6072 

900!  2.9032 1  49.781 7 1  44.8036 
900I  1.4516I  24.8908I  22.4018 


$19.2952 

9-6476 

3-8590 

1-9295 

.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared  with 

silver  in 
United  States 
silver  dollar. 


5  francs . . . . 
2  francs. . . . 

I  franc 

50  centimes 
20  centimes 


GrcDiis. 
25.0000 
10.0000 
5.0000 
2.5000 
1. 0000 


IjOOOths  I  Grams.  \     Grains.    \     Grains. 


900 
S35 
835 
835 
835 


22.5OO0I385.8089I347.2280 
8.3500  1 54.3235 1 128.8601 

4.1750  77-i6i7l  64.4300 
2.0875  38.5808I  32.2150 
0.8350    1 5.4323 1  12.8860 


$0.9352 
-3470 
-1735 
.0867 

-0347 


MEXICO. 


Mexico  is  a  bimetallic  country,  but  the  legal  standard  is  the  silver  dollar 
(peso).  The  Mexican  silver  dollar  circulates  not  only  in  Mexico,  but, 
under  the  name  of  piaster,  is  the  current  coin  of  several  countries  in 
America,  Asia  and  Africa. 

The  weight,  fineness,  etc.,  of  the  coins  of  Mexico  are  as  follows : 


34S 


SMITH'S  FINANCIAL  DICTIONARY. 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value   in 

United  States 

gold  coin. 


20  pesos 

ID  pesos 

5  pesos 

2j^    pesos    (no    longer 

coined)    

Peso    


Grajiis. 
33.8410 
16.9200 

8.4600 

4.2300 
1.6920 


l.OOUths  I  Grants.  \     Grants. 


875129.6108 
875 1 14.8050 
87s  I    74025 


87=;! 
875  i 


3.7012 
1.4805 


522.2463 
261.1154 
130.5577 

65.2788 
26.1 1 15 


Grains. 

4S6.965.S 
228.4760 
1 14.2380 

57.1190 
22.8476 


$19.6798 
98396 
4.9198 

2.4599 
■9839 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared  with 

silver  in 
United  States 
silver  dollar. 


I  Grains. 

Peso    I27.0730 

50  centavos  (no  longer  I 

coined)    ii3-536o 

20  centavos j  5.4146 

10  centavos !  2.7073 

5   centavo |   1.3536 


l.OUOths 
902.7 

902.7 
902.7 
902.7 
902.7 


Grams. 
24.4408 

12.2204 
4.8881 
2.4440 
1.2220 


Grains. 
417.8001 


Grains. 
377-1803 


208.9000  188.5901 
83.5600  754360 
4I.7800I  37.7180 
2O.89O0I     18.8590 


$1.0159 

.5079 
.2031 
.1015 
.0507 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

Grams. 

Grains. 

I    centavo .... 

3.0000 

95  per  cent  coo- 
oer,  4  per  cent 
tin,    and   i    per 
cent   zinc. 

46.2970 

To       the 
amount    of 
25      centa- 
vos. 

$0.0098 

NETHERLANDS,  THE  (HOLLAND). 
The   Netherlands    is    classed   as    a    double-standard   country,    but    the 
country  is  on  a  gold  basis.      The  foreign  exchanges  have  adjusted  them- 
selves as  if  the  Netherlands  possessed  a  gold  standard. 

The  monetary  system  of  the  Dutch  colonies  is  the  same  as  that  of  the 
Netherlands. 
The  w^eight,  fineness,  etc.,  of  the  coins  of  the  Netherlands  are  as  follows: 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

10   florins 

Grants.  |  l,000tlis     Grams.  ]     Grains.    \     Grains. 

6.7200I      Qoo    6.oa8oIio^.70c;4I  o-^.^-^aS 

$4.0195 

-^ 

■ 

SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Rixdaler   (2^2  florins) 

Florin   

Half   florin.. 

Quarter    florin 

Tenth  florin 

Twentieth    florin 


Grams. 

l,000ths 

Grains. 

Grains. 

Grains. 

25.0000 

945 

23.6250 

385.8089 

364-5894 

10.0000 

945 

9.4500 

154.3235 

145-8357 

5.0000 

945 

4-7250 

77.1617 

72.9178 

3-5750 

640 

2.2880 

55-1706 

35-3092 

1.4000 

640    0.8960 

21.6052 

13-8273 

0.6850 

640 

0.4384 

IO.57II 

6.7655 

$0.9820 

-3928 
.1964 
-0951 
.0372 
.0182 


SMITH'S  FINANCIAL  DICTIONARY. 


349 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weijjht. 

Legal  tender. 

Value. 

Bronze. 

Grams. 

Grahi.'!. 

2J/2  cents 

4.0000 

95   per  cent  cop- 

61.7294 

To       the 

1  $0.0100 

I   cent 

2.5000 

per,  4  per  cent 

38.5807 

amount    of 

!    .0040 

>2  cent 

1.2500 

1      tin,   and    i    per 
1      cent  zinc. 

19.2903 

1 

I  florin. 

1 

1        .0020 

i 

NEWFOUNDLAND. 

Newfoundland  has  a  monetary  system  separate  and  independent 
from  that  of  the  Dominion  of  Canada.  The  standard  is  gold  and  the  unit 
is  the  gold  dollar,  which  is  not  coined,  but  which  contains,  theoretically, 
25.682  grains  or  1.664  grams  of  gold  .916  2-3  fine.  It  is,  therefore, 
worth  $1.01.38  in  United  States  coin.  The  actual  gold  coin  is  the  $2 
piece  which  weighs  double  the  unit.  The  dollar  of  the  United  States  and 
the  British  sovereign  are  full  legal  tender  at  98.5  cents  and  $4.80  respectively. 

Newfoundland  has  silver  coins  of  50,  20,  10  and  5  cents,  all  of  which 
are  .925  fine.  The  50-cent  piece  or  half-dollar  weighs  181.81  grains  or 
11.782  grams-  Thus,  this  colony  has  the  coins  of  the  United  States  in 
name,  but  of  the  British  standard  of  fineness.  The  minor  coin  is  the  cent, 
composed  of  95  per  cent  copper,  4  per  cent  tin  and  i  per  cent  zinc;  it 
weighs  %7  1-2  grains,  whereas  the  cent  of  the  United  States  weighs  but  48 
grains. 

NICARAGUA. 

Accounts  in  Nicaragua  are  kept  in  the  silver  peso  or  piaster. 

The  weight,  fineness,  etc.,  of  the  coins  in  use  in  Nicaragua  are  as  fol- 
lows : 

GOLD. 


Denomination. 


Onza  or  doubloon.  . 

Half  onza 

20  pesos 

10  pesos 

5  pesos 

2    pesos I  3.2258 

I  peso I   1.6129 


Weight. 


Fine- 
ness. 


Fine 
vvgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


Grams. 
27.0643 
13-5321 
32.2580 
16.1290 

8.0645 


l.OOOths 
875 
87s 
900 
900 
900 
900 
900 


Grams. 
23.6812 
11.8406 


Grains. 

417.6659 

208.8329 


29.0322497.8169 


I4.5161 
7.2580 
2.9032 

I -45 16 


248.9084 

124.4542 

49.7816 

24.8908 


Grains. 
365-4576 
182.7288 
448.0352 
224.0176 
112.0088 
448035 
22.4017 


$15-7389 
7.8694 
19.2952 
9.6476 
4.8238 
1-9295 
•9647 


SILVER. 


Denomination. 


Weight. 


Peso    

Half  peso.  . . 
Quarter  peso 

Dime    

Half  dime.  . . 


Grams. 
25.0000 
12.5000 
6.2500 
2.5000 
1.2500 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


l,000ths  j  Grants. 

900(22.5000  385.8089 
900 1 1 1.25O0I  192.9044 
900I  S.6250I  96.4522 
835 1  2.0875 1  38.5808 
835 1  LO437I  19.2904 


Grains.    I    Grains. 


347.2280 

173.6140 

86.8070 

32-2150 

16.1075 


$0.9352 
.4676 
■2338 
.0867 
-0433 


350 


SMITH'S  FINANCIAL  DICTIONARY. 


MINOR  COINS. 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

I  centimo. . . . 

Grams. 
2.5000 

75  per  cent  cop- 
per and  25  per 
cent  nickel. 

Grains. 
34.7228 

$0.0100 

NORWAY. 

For  general  information  as  to  the  money  of  Norway  see  Scandinavian 
Union,  The. 

The  weight,  fineness,  etc.,  of  the  coins  of  Norway  are  as  follows : 


GOLD. 


Denomination. 


Denomination. 

Weight. 

Fine, 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  crowns 

Grains. 
8.9606 
4.4803 
2.24.15 

l,OO0ths     Grams. 
900     8.0645 
900     4.0322 
900     2.O161 

Grains. 

138.2831 

69.1415 

34.5707 

Grains. 

124.4548 

62.2274 

31.1137 

$5.3598 
2.6799 
1.3389 

10  crowns.  .'. 

5   crowns 

SILVER. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


2  crowns 
I  crown. 
50  ore. . . 
40  ore . . . 
25  ore. . . 
10  ore. . . 


Grams.  ■ 

l.OOOths 

Grams. 

Grains. 

Grains. 

15.0000 

800 

12.0000 

231.4853 

185.1882 

7.5000 

800 

6.0000 

115.7426 

92.5941 

5.0000 

600 

3.0000 

77.1617 

46.2970 

4.0000 

600 

2.4000 

61.7294 

37.0376 

2.4200 

600 

1.4520 

37.3463 

22.4077 

1.4500 

400 

.5800 

22.3769 

8.9507 

$0.4988 
.2494 
.1247 
.0997 
•0603 
.0241 


MINOR  COINS 

^ 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 
5  ore 

■   Grains. 
8.0000 
4.0000 
2.0000 

95  per  cent  cop- 
c     per,  4  per  cent 
tin,   and    i    per 
'       cent   zinc. 

Grains. 
[123.4588 
61.7294 
1     30.8647 

1  T  0       the 
amount    of 
I  crown. 

f  $0.0133 

I      .0053 
1       .0026 

2  ore 

I   ore 

PARAGUAY. 

The  money  of  account  of  Paraguay  is  the  peso,  divided  into 
8  reals;  it  is  also  divided  into  100  centavos.  The  country,  however,  has  a 
depreciated  paper  currency.  The  gold  onza  is  rated  officially  at  17  1-2  paper 
pesos.  Five-franc  pieces,  venezolanos  and  other  piasters  of  the  same  kind 
are  in  like  manner  reckoned  as  equivalent  to  i  1-4  paper  pesos. 


SMITH'S  FINANCIAL  DICTIONARY. 


351 


MINOR  COINS. 

Denomination. 

Weig-ht. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

20  cents 

10  cents 

5  cents 

Grains. 
4.0000 

3.0000 

2.0000 

I  75   per   cent   cop- 
r     per  und  25  per 
1       cent  nickel. 

Grains. 

\    61.7294 
-'     46.2070 

30.8647 

t  T  0  the 
amount    of 

J  2  per  cent 
of  the  pay- 
ment. 

("$0.1929 
-       .0964 
i      .0482 

PERSIA. 

In  Persia  ten  shahis  equal  i  penebat ;  2  penebats  equal  i  sahib- 
ghiran  or  kran;  10  krans  equal  i  toman,  or  200  shahis  equal  i  toman.  The 
standard  is  silver.  The  principal  coin  is  the  kran,  a  silver  piece  of  71.065 
grains  .900  fine.  The  krans  which  circulate  vary,  however,  greatly,  as  the 
mints  of  the  country  are  not  reliable.  The  fineness  of  the  coins  oscillates 
between  .760  and  .900.  In  larger  transactions  the  toman  is  taken  as  the 
unit,  reckoned  equal  to  10  krans.  There  are  some  gold  tomans  and  half- 
tomans  in  existence,  but  they  are  not  the  standard;  they  circulate  only  as 
commercial  money   and  are  taken  by  weight. 

The  weight,  fineness,  etc.,  of  the  coins  of  Persia  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

2   tomans 

Graijis. 
87.962 
43-981 

l.OOOths  1  Grains. 
900 1    79.166 
000     in  cS-? 

$3,409 
1.704 

Toman    

MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Copper. 

1  abassi     (4 
chais)     .... 

2  chais 

Grants. 

20.0000 

10.0000 

5.0000 

2.5000 

Grains. 
308.6471 

IS4-323.S 
77-i6i7 
38.5808 

$0.0340 
.0170 
.0085 
.0042 

I    chai 

Yi  chai 

PERU. 

Peru  has  the  double  standard.  The  unit,  the  silver  sol,  is  of  the  same 
weight  and  fineness  as  the  French  5-franc  piece.  The  new  gold  coin, 
called  the  libra  peruana  (Peruvian  pound),  is  of  the  same  weight  and  fine- 
ness as  the  pound  sterling  and  both  are  now  in  circulation  in  Peru  concur- 
rently with  the  silver  sol  at  the  legal  par  of  equality,  which  is  that  of  i  to  31. 
This  ratio  values  the  sol  at  24d.  and  the  libra  at  10  soles.  Paper  money  dis- 
appeared from  circulation  in  1887  and  its  emission  has  since  been  prohibited. 

The  weight,  fineness,  etc.,  of  the  coins  of  Peru  are  as  follows  : 


35^ 


SMITH'S  FINANCIAL  DICTIONARY. 


GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

Libra   

Grams. 
7.9880 

3-9040 

l,000ths 

9i6§ 
9i6§ 

Grams. 
7-3223 
3.661 1 

Grains.    |    Grains. 
I23.2744llI'?.OOm 

$4.8665 

Half  libra 

61.6372 

.S6.5OO7 

2.4332 

SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Sol 

Half  sol 

Fifth    sol...... 

Dinero    (dime) 
Half    dinero.    . 


1  Grams. 

l.UOUths 

Grams. 

Grains. 

Grains.    \ 

25.0000 

900 

22.5000 

385.8089 

347.2280 

12.5000 

goo 

11.5000 

192.9044 

173.6140 

5.0000 

900 

4.5000 

77.1617 

69.4456 

2.5000 

900 

2.2500 

38.5808 

34.7228 

1 .2500 

900 

1. 1 250 

19.2904 

17-3614 

$0-9352 
.4676 
.1870 

.0935 
.0467 


PORTUGAL. 

The  standard  of  Portugal  is  gold  monometallic,  with  the  milrei  of 
1,000  reis  as  the  monetary  unit.  One  thousand  milreis  or  1,000,000  reis 
is  called  a  conto.  Gold  is  coined  in  imlimited  amounts  on  private  ac- 
count at  a  mint  charge  of  i  milrei  per  kilogram.  Silver,  like  copper,  is 
coined  only  in  divisional  coins.  Silver  is  legal  tender  only  to  the  amount  of 
5  milreis,  but  by  Lisbon  commercial  usage  one-third  of  all  payments  is 
accepted  in  that  metal. 

The  weight,  fineness,  etc.,  of  the  coins  of  Portugal  are  as  follows : 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


Crown    

Half  crown,  5  milreis. 
Fifth  crown,  2  milreis. 
Tenth  crown,  i  milrei. 


Grams. 

17.7350 

8.8675 

3-5470 
1-7735 


l,000tlis  I  Grams.  \    Grains. 
9i6fll6.2570l273.6928 


9i6§l  8.1285 
916I  3.2514 
916II  1.6257 


136.8464 
.54-7385 
57.3692 


Grains.    \ 

250.8851 

125.4425 

50.1770 

25.0885 


$10.8046 
5-4023 
2.1609 
1 .0804 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


1,000  reis 
500  reis. . 
200  reis.  . 
100  reis. . 
50      reis.  . 


I  Grains. 

25.0000 

12.5000 

5.0000 

2.5000 

1.2500 


l.OOOths 
916.^ 
9165 
916.^ 
916.^ 
9i6ii 


Grants. 
22.9166 
11-4583 
45833 
2.2916 
1. 1 458 


Grains. 
385-8089 
192.9044 
77.1617 
38.5808 
ig.2904 


Grains. 
353.6581 
1 76.8290 
70.7316 
35-3658 
17.6829 


$0.9526 
■4763 
.1905 
.0952 
.0476 


SMITH'S  FINANCIAL  DICTIONARY. 


353 


MINOR  COINS. 


Denomination. 


Nickel. 

100  reis. 
50  reis. . 

Bronze 

20  reis . . 
10  reis. . 
5  reis. . . 


Weight. 


Grams. 

4.0000 
2.5000 


12.0000 
6.0000 
3.0000 


Composition. 


1  75  per  cent  cop- 
1-  per  and  25  per 
j      cent  nickel. 

I  96  per  cent  cop- 
per, 2  per  cent 


tin,   and   2   per 
cent  zinc. 


Weight. 


Grains. 

61.7294 
38.5807 


185.1882 
92.5941 
46.2970 


Legal  tender. 


ITo  the 
i-  amount  of 
J  100  reis. 


Value. 


$0.1080 
.0540 

r  .0216 
-i  .0108 
i    .0054 


The  Portuguese  possessions  in  Asia  use  a  coinage  of  which  the  unit  is 
the  xerafin,  equal  to  1-2  rupee  or  5  tangas,  each  tanga  being  equal  to  60 
Portuguese  reis. 

ROUMANIA. 

The  system  of  the  Latin  Union  prevails  in  Roumania,  the  franc 
being  called  the  lei  and  the  centime  the  bani ;  but  a  measure  passed 
by  the  Roumanian  chamber  in  1890  abrogated  the  double  standard  and  sub- 
stituted for  it  the  single  gold  standard,  with  a  subsidiary  silver  coinage 
having  a  paying  power  to  the  amount  of  50  leis  or  francs. 

The  weight,  fineness,  etc.,  of  the  coins  of  Roumania  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  leis 

10  leis 

Gravis.  \  l,000ths  |  Grajiis.  |    Grains. 
6.4516I        9001    5.8064     99-5635 
3.2258I        900I    2.9032     49-7817 

Grains. 
89.6072 
44.8036 

$3-8590 
1-9295 

SILVER. 

Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar 


I  Gravis. 

5    leis 125.0000 

2    leis 10.0000 

Lei I  5.0000 

Half  lei 1  2.5000 


l.OOOths  I  Grams.  \    Grains.    \    Grains. 
9OOI22.5OOOI385.8089I347.228O 


83d 
83s 
835 


8-3500 
4.1750 
2.0875 


154-3235 
77.1617 
38.5808 


128.8601 
64.4300 
32.2150 


$0-9352 
•3470 
-1735 
.0867 


MINOR  COINS. 

Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

10  bani 

5  bani 

2  bani 

I  bani 

Grams. 

10.0000 

5.0000 

2.0000 

1. 0000 

1  95   per  cent  cop- 
';      per,  4  per  cent 
;     tin,   and    i   per 
J      cent  zinc. 

Grains. 

1  154-3235 
1      77.1617 

!    30.8647 
^    15-4323 

]To       the 
r  amount    of 
j  5  leis. 

[$0.0192 
i       .0096 
!       .0038 
I      .0019 

354 


SMITH'S  FINANCIAL  DICTIONARY. 


RUSSIA. 

The  monetary  system  of  Russia  is  based  on  gold ;  the  unit  is 
the  ruble,  divided  into  lOO  copecks.  Gold  coin  of  full  weight  is  legal  tender 
for  any  amount.  A  tender  of  payment  of  money  in  silver  coins  of  i  ruble, 
50  copecks  or  25  copecks  is  legal  tender  among  private  persons  only  to  an 
amount  not  exceeding  25  rubles  and  in  other  silver  coins,  as  well  as  in 
copper  coins,  to  the  amount  of  3  rubles.  Government  treasuries  receive  the 
above-mentioned  coins  to  any  amount  in  all  payments,  with  the  exception  of 
custom  house  duties,  in  which  case  the  amount  of  silver  and  copper  coin  to 
be  received  as  legal  tender  is  fixed  by  the  custom  house  regulations. 

1  he  weight,  fineness,  etc.,  of  the  coins  of  Russia  are  as  follows : 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


15  rubles    (imperials). 

10  rubles 

7^  rubles   (half  impe- 

reals 

5   rubles 


Gratiis. 

12.9039 

8.6026 

6.4519 

4-3063 


l,000ths 
900 
900 

900 
900 


Grams. 


Grains.    I    Grains. 


II.6i35ji99.i376 
7.7423 1 132.7584 

5. 8067 1  99-5688 
3.8711!  66.3792 


179.2239 
1 19.4826 

89.6119 
59-7413 


$7.7185 
5-1456 

3-8592 
2.5728 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 

con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


I  ruble. . . 
50  copecks 
25  cooecks 
20  copecks 
15  copecks 
10  copecks 
5  copecks. 


Grams. 

l.OOOths 

Grams. 

19-9957 

900 

17.9961 

9.9978 

900 

8.9980 

4.9989 

900 

4-4990 

3-5992 

500     1.7996 

2.6994 

500     1.3497 

1.7996 

500       .8998 

.8998 

500       .4499 

Grains.    \    Grains. 
308.58111277.7230 
154.2905  138.8615 

7-.  1 452 1    69.4307 

55.5446I  2.T.'772Z 

41.6584I  20.8292 

27.7723I  13-8861 

13.8861 1  6.9430 


$0.7480 
•3740 
.1870 
.0748 
.0561 

•0374 
.0187 


MINOR  COINS. 


Denomination.    Weight. 


Copper. 

5  copecks. , 
3  copecks. 
2  copecks. 
I  copeck.. 
Yi  copeck. 
54  copeck . 


Grams. 

16.3805 
9-8283 
6.5.522 
3.2761 
1.6380 
.8190 


Composition. 


Weight. 


Grains. 
252.7895 
151-6737 
IOI.II58 

50.5579 
25.2789 
12.6394 


Legal  tender. 


To        the 
[■  amount    of 
3  rubles. 


Value. 


r  $0.0257 

I         -0X54 

:       .0102 

.0051 

I  -0025 

I       .0012 


SALVADOR. 

Accounts  in  Salvador  are  kept  in  the  silver  peso  or  piaster. 

The  weight,  fineness,  etc.,  of  the  coins  in  use  in  Salvador  are  as  follows: 


SMITH'S  FINANCIAL  DICTIONARY. 


355 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


Onza  or  doubloon. 

Half  onza 

20  pesos 

10  pesos 

5  pesos 

2  pesos 

I  peso 


Grams. 

l.OOOths 

Grains. 

Grains. 

Grains. 

27.0643 

875 

23.6812 

417.6659 

315.4576 

13-5321 

875 

1 1 .8406 

208.8329 

182.7288 

32.2580 

900 

29.0322 

497.8169 

448.0352 

16.1290 

900 

I4.5161 

248.9084 

224.0176 

8.0645 

900 

7.2580 

124.4542 

112.0088 

32258 

900 

2.9032 

49.7816 

44-8035 

I.6129 

900 

1. 45 1 6 

24.8908 

22.4017 

$15-7389 
7.8694 

19.2952 
9.6476 
4-8238 

1-9295 
.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


I  Grams. 

Peso    I25.0000 

Half   peso J12.5000 

Quarter  peso 1  6.2500 

Dime    I  2.5000 

Half  dime 1   1.2500 


l.OOOths 

Grams. 

Grains. 

Grains. 

900 

22.5000 

385.8089 

347.2280 

900 

11.2500 

192.9044 

173.6140 

900 

5.6250 

96.4522 

86.8070 

835 

2.0875 

38.5808 

32.2150 

835 

1-0437 

19.2904 

16.1075 

$0.9352 
.4676 

■22,2,^ 
.0867 
-0433 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

I   centimo 

2.5000 

75  per  cent  cop- 
per and  25  per 
cent  nickel. 

34.7228 

$0.0100 

SANTO  DOMINGO. 

This  country  ostensibly  has  the  gold  standard,  with  the  dollar  of  the 
United  States  as  the  unit,  but  the  circulation  consists  principally  of 
Mexican  coins. 

SCANDINAVIAN    UNION,    THE    (DENMARK,    NORWAY, 

SWEDEN). 

The  Scandinavian  Monetary  Union  embraces  Sweden,  Norway  and 
Denmark.  These  three  kingdoms  concluded  in  1873  and  1875  a  monetary 
convention  based  on  the  employment  of  the  single  gold  standard  and  on  a 
common  system  of  coins  and  money  of  account.  The  krone  or  crown, 
divided  into  100  ore,  is  the  monetary  unit. 

Silver  coins  are  legal  tender  as  follows:  The  2-kronen  and  i-krone 
pieces  to  the  amount  of  20  kronen ;  the  50,  40,  25  and  lo-ore  pieces  to  the 
amount  of  5  kronen.  All  the  coins  above  mentioned  have  legal  currency  in 
the  three  kingdoms.  The  monetary  convention  does  not  limit  the  coinage 
by  the  governments  of  the  silver  or  bronze  coins.     In  each  of  the  three 


336 


SMITH'S  FINANCIAL  DICTIONARY. 


states  are  public  treasuries,  at  which  any  sum  of  fractional  coin  divisible  by 
10  kronen  may  be  exchanged  for  gold. 

The  weight,  fineness,  etc.,  of  the  coins  of  the  Scandinavian  Union  are 
as  follows: 

GOLD. 


Denomination. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  crowns 

Grams. 
89606 

l,000ths 
nnn 

Grams. 
8.0645 
4.0322 
2.O161 

Grains. 

138.2831 

69.1415 

34-5707 

Grains. 

124.4548 

62.2274 

3I.II37 

$5-3598 
2.6799 

1-3389 

10  crowns 

4.4803         900 
2.2415         900 

5  crowns 

SILVER. 

Weight. 


Fine- 
nes.s. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


2  crowns 
I  crown . 
50  ore . . . 
40  ore. . . 
25  ore. . . 
10  ore. . . 


Grams. 

15.0000 
7.5000 
5.0000 
4.0000 
2.4200 
1.4500 


l,000ths 
800 
800 
600 
600 
600 
400 


Grains.  \    Grains. 
12.00001231.4853 

6.0000  115.7426 

3.00001  77.1617 
2.4000!  61.7294 
1. 4520 1  37.3463 

.5800 1  22.3769 


Grains. 
185.1882 

92,5941 
46.2970 
37.0376 
22.4077 
8.9507 


$0.4988 
.2494 
.1247 

•0997 
•0603 
.0241 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze, 
c  ore 

Grams. 
8.0000 
4.0000 
2.0000 

1  95  per  cent  cop- 
1-     per,  4  per  cent 
j      tin,   and    i    per 
cent  zinc. 

Grains. 
,  I23.458S 
1     61.7294 

!  30.8647 

1  To       the 
!  amount    of 
'  I  crown. 

1    $0.0133 
1        -0053 
1,       .0026 

2  ore 

I   ore 

SERVIA. 

Servia  has  the  same  decimal  system  of  coinage  as  the  Latin 
Union.  The  unit  is  the  dinar;  the  hundredth  part  of  the  dinar  is  the  para. 
Five  hundred  dinars  constitute  the  legal  tender  for  5-dinar  pieces  and  50 
dinars  for  the  rest  of  the  silver  coinage. 

The  Servian  treasury  receives  foreign  gold  and  silver  money  coined 
under  the  same  system  as  the  Servian  and  admits  it  into  circulation  under  a 
fixed  tariff,  provided  reciprocal  treatment  is  accorded  to  the  Servian  coinage 
in  the  foreign  states  to  which  such  coinage  belongs.  The  gold  coinage  of 
certain  other  countries  not  parties  to  the  Latin  Union  is  received  into  cir- 
culation under  a  special  tariff  in  which  the  pound  sterling  is  admitted  at  25 
dinars. 

The  weight,  fineness,  etc.,  of  the  coins  of  Servia  are  as  follows : 


SMITH'S  FINANCIAL  DICTIONARY. 


357 


GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure- 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  dinars 

Grains. 

6.4=;i6 

3-2258 

l.OOOths     Grains. 

900    =;.8o6/i 

Grains. 

99-5635 

49-7817 

Grains. 
89.6071 

44-8035 

1 

$3-8590 

10  dinars 

900 

2.9032 

1-9295 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


5  dinars. . . 
2  dinars . . . 
Dinar  .  . .  . 
Half  dinar 


Grams. 
25.0000 

10.0000 
5.0000 
2.5000 


l.OOOths 
900 

835 

835 


Grams. 
22.5000 
8.3500 
4.1750 
2.0875 


Grains. 
385-8089 

154-3235 
77.1617 
38.5808 


Grains. 

347.2280 

128.8601 

64.4300 

32.2150 


$0.9352 
-3470 
■1735 
.0867 


MINOR  COINS. 


Denomination. 


Nickel. 

20  paras. 
10  paras. 
5  paras.. 

Bronze, 
10  paras. 
5  paras. . 
I  para. . . 


Weight. 


Grains. 
6.0000 
4.0000 
3.0000 


10.0000 
5.0000 
1. 0000 


Composition. 


1 75  per  cent  cop- 
j-  per  and  25  per 
J      cent  nickel. 

95  per  cent  cop- 
1  per,  4  per  cent 
I  tin,  and  l  per 
•'      cent   zinc. 


Weight. 


Grains. 

{  92.5941 
'',  61.7294 
i    46.2970 


[154-3235 
-i     77.1617 

I    15-4323 


Legal  tender. 


1  To        the 
r  amount   of 

J  5 


francs. 


I T  o  the 
j^  amount  of 
J  I  franc. 


Value. 


$0.0385 
.0192 
.0096 


.0192 
.0006 
.0019 


SIAM. 

In  Siam  800  cowries  equal  one  fuang;  2  fuango  equal  i  salung; 
4  salungo  equal  i  bat  or  tical;  4  bats  equal  i  tamling;  20  tamling  equal  i 
chang;  50  chang  equal  i  hap;  100  hap  equal  i  tara. 

Cowries  Calso  called  bia  in  Siam)  are  the  well-known  shells  used  in 
many  parts  of  Asia  and  Africa  as  a  medium  of  exchange  for  small  values. 
In  Siam  about  220  are  reckoned  equal  to  i  penny  sterling,  which  corresponds 
closely  to  the  general  rating  of  the  bat  or  tical  at  2s.  6d.  sterling.  This  is, 
however,  more  than  the  actual  average  value  of  the  coin,  which  is  58.18 
cents. 

Small  pewter  and  copper  coins  have  been  introduced  as  a  substitute  for 
the  cowry  shell-  The  pewter  coins  are  called  lot  and  at.  They  are  small 
flat  bits  of  pewter.  Two  lots  equal  i  at.  The  copper  coin  2  ats,  about  the 
same  size  as  the  English  halfpenny,  only  a  little  thicker,  is  called  song  peis. 
Two  song  peis  equal  i  fuang.  The  fuang  and  salung  are  flat  pieces  of  silver ; 
simply  weights  of  the  metal.  It  is  the  same  with  the  bat.  The  coin 
called  bat  or  tical  is  a  small  bit  of  a  silver  bar  bent  and  with  the  ends 
beaten  together.     It  has  two  or  three  small  stamps  impressed  upon  it.     The 


358 


SMITH'S  FINANCIAL  DICTIONARY. 


weight  of  the  bat  or  tical  ranges  between  212  and  236  grains  troy    and  is 
generally  taken  at  236  grains  (15.292  grams). 

The  fineness  of  the  tical,  as  well  as  that  of  the  fuang  and  salung,  aver- 
age 906.25,  it  is  said.  Taking  the  average  weight  of  the  tical  or  bat  at  224 
grains,  the  average  fineness  of  the  coin  at  906.25  the  metallic  value  may  be 
computed  at  2s.  3.4325d.  sterling  (at  6od.  per  ounce  British  standard  silver). 
This  corresponds  closely  to  the  rating  of  the  tical  by  the  merchants  in  the 
Siamese  ports,  where  7  ticals  are  reckoned  equal  to  4  Spanish  piasters  or 
dollars.  The  .mint  at  Bangkok  lately  exchanged  Mexican  dollars  against 
ticals  at  the  rate  of  5  trcals  for  3  Mexican  dollars.  American  silver 
dollars  are  also  taken  by  the  mint.  They  are  weighed  against  Mexican 
dollars  and  then  paid  for  at  the  above  rate  of  5  ticals  for  3  Mexican  dollars. 

Exchange  on  Hongkong  and  Singapore  is  quoted  in  per  cent  premium 
or  discount.     If  the  quotations  fall  to  i  per  cent  or  more  discount   Mexican 
dollars  are  being  sent  from  China  to  Siam.     Exchange  on  London  is  quoted 
in  shillings  and  pence  per  i  Mexican  dollar.     If  payments  are  made  in  ticals 
it  is  at  the  rate  of  5  ticals  for  3  Mexican  dollars.    ' 

SPAIN. 

Spain  employs  the  nionetarj'  system  of  the  Latin  Union.  The 
silver  peseta,  equivalent  to  the  franc,  is  the  unit.  It  has  the  same  gold  and 
silver  coins  as  the  union,  with  a  gold  25-peseta  piece  added.  Gold  and  the 
5-peseta  silver  piece  are  unlimited  legal  tender;  divisional  silver  coins — i.  e., 
all  silver  coins  of  less  value  than  5-francs — only  to  the  amount  of  50  pesetas. 

The  weight,  fineness,  etc.,  of  the  coins  of  Spain  are  as  follows : 


GOLD. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Grams. 

l,000ths 

Grants. 

32.2580 

900 

29.0322 

16.1290 

900 

I4.5161 

8.0645 

900    7.25S0 

6.4516 

900    5.8064 

3-2258 

900    2.9032 

I.6129 

900 

I.4S16I 

Weight. 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


lOp  pesetas 
50  pesetas. 
25  pesetas. 
20  pesetas. 
10  pesetas. 
5  pesetas.. 


Grains. 

497.8178 

248.9089 

124.4543 

99-5635 

49.7817 

24.8908 


Grahis. 

448.0360 

224.0180 

112.0089 

89.6072 

44-8036 

22.4018 


$19.2952 
9.6476 
4-8238 
38590 
1-9295 
.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 

wgt. 

Weight. 

Pure 
silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


5  pesetas.  . . 
2   pesetas. . . 

Peseta    

50  ccnlimos. 
20    centimes 


Grams. 

l.OOOths 

25.0000 

900 

10.0000 

835 

5.0000 

835 

2.5000 

835 

1. 0000 

835 

Grants.  I  Grains. 
22.5000]  385.8089 
8.35OOI  154.3235 
4.1750!  77.1617 
2.08751  38.5808 
•8350!    154323 


Grains. 
347.2280 
128.8607 
64.4300 
32.2150 
12.8860 


$0.9352 
•3470 
■1735 
.0867 
•0347 


SMITH'S  FINANCIAL  DICTIONARY. 


359 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

10   centimes.  . 
i;   centimes. .  . 
2  centimes. . . 
I   centime.  . . . 

Grams. 

10.0000 
5.0000 
2.0000 
1. 0000 

1  O'l   per   cent   cop- 
;     per,  4  per  cent 
i     tin,    and    i    per 
!      cent   zinc. 

Grains. 
\  154-3235 
■     77-1617 

;,   30.8647 
1    15-4323 

! T  e       the 

[amount    of 

5    pesetas. 

$0.0192 

.0096 

.0038 

I        .0019 

SWEDEN. 

For  general  information  as  to  the  money  of  Sweden  see  Scandinavian 
Union,  The. 

The  weight,  fineness,  etc.,  of  the  coins  of  Sweden  are  as  follows : 


GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 
gold 
con- 
tained. 

Value  in 

United  States 

gold  coin. 

20  crowns 

10  crowns 

5  crowns 

Grams. 
8.9606 
4.4803 
2.2415 

l.OOOths 
900 
900 
900 

Grams.       Grains.        Grains. 
8.0645   138.2831    124.4548 
4.0322     69-1415     62.2274 
2  0161      ■^•1-=;707     'W.WXI 

$5-3598 
2.6799 
1.3389 

SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 

wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value  com- 
pared with 
silver  in 
United  .States 
silver  dollar. 


2  crowns 
I  crown . 
50  ore.  .. 
40  ore. . . 
25  ore . . . 
10  ore. . . 


Grams. 
15.0000 
7.5000 
5.0000 
4.0000 
2.4200 
1.4500 


l,000ths 
800 
800 
600 
600 
600 
400 


Grams. 
12.0000 
6.0000 
3.0000 
2.4000 
1.4520 
.5800 


Grains. 

231-4853 

115.7426 

77.1617 

61.7294 

37-3463 
22.3769 


Grains. 

185.1882 

92.5941 

46.2970 

370376 
22.4077 

8.9507 


$0.4988 
.2494 
.1247 
.0997 
.0603 
.0241 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

5  ore 

2  ore 

Grams. 

8.0000 
4.0000 
2.0000 

^  95  per  cent  cop- 
(      per,  4  per  cent 

tin,   and    i    per 

cent  zinc. 

Grains. 

[123-4588 
-      61.7294 
1     30.8647 

To       the 
( amount    of 
)  I  crown. 

,   $0.0133 
\        .0053 
'        .0026 

I  ore 

SWITZERLAND. 

For   general   information   as   to   the   money   of   Switzerland   see   Latin 
Union,  The. 

The  weight,  fineness,  etc.,  of  the  coins  of  Switzerland  are  as  follows : 


3^0 


SMITH'S  FINANCIAL  DICTIONARY. 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. ! 


Pure 
gold 
con- 
tained. 


Value  in 

United  States 

gold  coin. 


100  francs 
50  francs. 
20  francs. 
10  francs. 
5  francs. . 


Grams.     l.OOOths 

Gra  ms. 

Grains. 

Gra  ins. 

32.2580 

900 

29.0322 

497-8178 

448.0360 

16.1290 

900 

I4.5161 

248.9089 

224.0180 

6.4516 

900 

5.8064 

99-5635 

89.6072 

3.22581        900 

2.9032 

49-7817 

44-8036 

I.6129I        900 

1-4516 

24.8908 

22.4018 

$19.2952 

9-6476 

38590 

1-9295 

.9647 


SILVER. 


Denomination. 


Weight. 

Fine- 
ness. 

Fine 
wgt. 

Weight. 

Pure 

silver 
con- 
tained. 

Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


Grains. 
347.2280 
128.8601 
64.4300 
32.2150 
12.8860 


I  Grams. 

5  francs I25.0000 

2  francs 1 10.0000 

I  franc I  5.0000 

50  centimes |  2.5000 

20   centimes |   i.oooo 


l,000tlis  I  Grams. 


900 
835 
835 
835 

8^5 


22.5000 
8.3500 
4.1250 
2.0875 
0.8350 


Grains. 
385-8089 

154-3235 
77.1617 
38.5808 
15-4323 


$0.9352 
•3470 
•1735 
.0867 

•0347 


MINOR  COINS. 


Denomination. 

W^eight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 

Grains. 

Graifis. 

20  centimes. .. 

4.0000 

Pure  nickel. 

61.7294 
j     46.2970 

1  T  0       the 

1    $0.0385 

10  centimes.  .. 

3.0000 

1  75  per  cent  cop- 

amount    of 

-'         .0192 

5  centimes .... 

2.0000 

1      per  and  25  per 
cent  nickel. 

1     30.8647 

1  10  francs. 

.0096 

Bronze. 

2  centimes.  . .. 

2.5000 

95  per  cent  cop- 
per, 4  per  cent 

J     38.5807 

(To       the 
(■  amount    of 

j         .0038 

I  centime 

1.5000 

tin,   and   i    per 
cent  zinc. 

\     23.1485 

2  francs. 

j        .0019 

TURKEY. 

The  monetary  system  of  Turkey  is  bimetallic,  with  the  piaster,  equal 
to  40  paras  3  aspes.  as  the  unit.  The  lOO-piaster  piece  or  gold  medjidie 
is  called  the  Turkish  pound. 

The  weight,  fineness,  etc.,  of  tne  coins  of  Turkey  are  as  follows : 

GOLD. 


Denomination. 

Weight. 

Fine- 
ness. 

Fine 

wgt. 

Pure 
weight.       |°'„d. 
tained. 

Value  in 

United  States 

gold  coin. 

5  lira  (500  piasters)..  . 
2y2  lira  (250  piasters). 
Lire    (100  piasters) . . . 
1/2  lira   (50  piasters)  .  . 
%  lira  (25  piasters)  . .  . 

Grams. 
36.0820 

18.0410 
7.2164 
3.6082 
1. 8041 

l,000ths 
916^ 
9i6if 
916I 
9165 
9i6§ 

Grams.    \    Grains. 
.•^3.07511556.8302 

16.5375  278.4151 
6.6150  II  1.3660 

3.3075     556830 

1.6537     27.8415 

1    Grains. 
510.4277 
255-2138 
102.0855 
51.0422 

25-5213 

$21.9822 
10.991 1 

4-3964 
2.1982 
1. 099 1 

SMITH'S  FINANCIAL  DICTIONARY. 


361 


SILVER. 


Denomination. 


Weight, 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


20  piasters 

10  piasters 

5   piasters 

2    piasters 

Piaster   

14  piaster  (20  paras) . . 


Grams. 
24.0550 
12.0275 

6.0137 

2.4055 

1.2027 

.6013 


l.OUOths 
830 
830 
830 
830 
830 
830 


1  Grams. 

Grains. 

Grains. 

19.9656 

371-2253 

308.1170 

9.9828 

185.6126 

154-0585 

4.9914 

92.8063 

77.0292 

1.9965 

37.1225 

30.8117 

.9982 

18.5612 

15.4058 

.4991 

9.2806 

7.7029 

$0.8299 
.4149 
.2074 

.0829 
.0414 

.0207 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Bronze. 

I    piaster    (40 

paras)  . . . . 
Yi  piaster  (20 

paras)    

^  piaster  (10 

paras)  .... 
\i    piaster    (5 

paras)  >... 
1-40  piaster  ( I 

para)    

Grams. 

21.3860 

10.6930 

5-3470 

2.6730 

•5346 

rFine   copper. 

95   per  cent  cop- 
per, 3  per  cent 
I     tin,      lYz      per 
1     cent    lead,    and 
1      Yi  per  cent  zinc. 

Gravis. 

i  330.0363 
I165.0181 

r     82.5090 

41-2545 
8.2501 

$0.0043 
.0021 

0010 

.0005 
.0001 

UNITED    STATES. 

In  1786  the  Congress  of  the  Confederation  chose  as  the  mone- 
tary unit  of  the  United  States  the  dollar  of  375.64  grains  of  pure  silver. 
This  unit  had  its  origin  in  the  Spanish  piaster  or  milled  dollar,  which  con- 
stituted the  basis  of  the  metallic  circulation  of  the  English  colonies  in 
America.  It  was  not  coined,  there  being  at  that  time  no  mint  in  the  United 
States. 

The  act  of  April  2,  1792,  established  the  first  monetary  system  of  the 
United  States.  The  basis  of  the  system  was :  The  gold  dollar,  containing 
24-75  grains  of  pure  gold,  and  stamped  in  pieces  of  $10,  $5  and  $2.50,  de- 
nominated, respectively,  eagles,  half-eagles  and  quarter-eagles;  the  silver 
dollar,  containing  371.25  grains  of  pure  silver.  A  mint  was  established- 
The  coinage  was  unlimited  and  there  was  no  mint  charge.  The  ratio  of 
gold  to  silver  in  coinage  was  i  to  15.  Both  gold  and  silver  were  legal 
tender.     The  standard  was  double. 

The  act  of  1792  undervalued  gold,  which  was  therefore  exported.  The 
act  of  June  28,  1834,  was  passed  to  remedy  this  by  changing  the  mint  ratio 
between  metals  to  i  to  16.002.  This  latter  act  fixed  the  weight  of  the  gold 
dollar  at  25.8  grains,  but  lowered  the  fineness  from  0.916  2-3  to  0.899225.  The 
fine  weight  of  the  gold  dollar  was  thus  reduced  to  23.2  grains.  The  act  of 
1834  undervalued  silver,  as  that  of  1792  had  undervalued  gold,  and  silver 


362  SMITH'S  FINANCIAL  DICTIONARY. 

was  attracted  to  Europe  by  the  more  favorable  ratio  of  I  to  15  1-2.  The  act 
of  January  18,  1837,  was  passed  to  make  the  fineness  of  the  gold  and  silver 
coins  uniform.  The  legal  weight  of  the  gold  dollar  was  fixed  at  25.8  grains, 
and  its  fine  weight  at  23.22  grains.  The  fineness  was,  therefore,  changed  by 
this  act  to  .900  and  the  ratio  to  i  to  15.988-f-. 

Silver  continued  to  be  exported.  The  act  of  February  21,  1853,  re- 
duced the  weight  of  the  silver  coins  of  a  denomination  less  than  $1,  which 
the  acts  of  1792,  1834  and  1837  had  made  exactly  proportional  to  the  weight 
of  the  silver  dollar,  and  provided  that  they  should  be  legal  tender  to  the 
amount  of  only  $5.  Under  the  acts  of  1792,  1834  and  1837  they  had 
been  full  legal  tender.  By  the  act  of  1853  the  legal  weight  of  the  half-dol- 
lar was  reduced  to  192  grains  and  that  of  the  other  fractions  of  the  dollar 
in  proportion.  The  coinage  of  the  fractional  parts  of  the  dollar  was  re- 
served to  the  government. 

The  act  of  February  12,  1873,  provided  that  the  unit  of  value  of  the  Uni- 
ted States  should  be  the  gold  dollar  of  the  standard  weight  of  25.8  grains, 
and  that  there  should  be  coined  besides  the  following  gold  coins :  A  quar- 
ter eagle  or  2  1-2-dollar  piece ;  a  3-dollar  piece ;  a  half-eagle  or  5-dollar  piece ; 
an  eagle  or  lo-dollar  piece;  and  a  double-eagle  or  20-dollar  piece,  all  of  a 
standard  weight  proportional  to  that  of  the  dollar  piece.  These  coins  were 
made  legal  tender  in  all  payments  at  their  nominal  value  when  not  below  the 
standard  weight  and  limit  of  tolerance  provided  in  the  act  for  the  single 
piece  and  when  reduced  in  weight  were  to  be  legal  tender  at  a  valuation 

in  proportion  to  their  actual  weight.  The  silver  coins  provided  for  by  the 
act  were  a  trade  dollar,  a  half-dollar  or  50-cent  piece,  a  quarter-dollar  and 
a  lo-cent  piece ;  the  weight  of  the  trade  dollar  to  be  420  grains  troy ;  the  half- 
dollar  12  1-2  grams;  the  quarter-dollar  and  the  dime,  respectively,  one-half 
and  one-fifth  of  the  weight  of  the  half-dollar.  The  silver  coins  were  made 
legal  tender  at  their  nominal  value  for  any  amount  not  exceeding  $5  in  any 
one  payment.  The  charge  for  converting  standard  gold  bullion  into  coin 
was  fixed  at  1-5  of  i  per  cent.  Owners  of  silver  bullion  were  allowed 
to  deposit  it  at  any  mint  of  the  United  States  to  be  formed  into  bars  or 
into  trade  dollars  and  no  deposit  of  silver  for  other  coinage  was  to  be  re- 
ceived. 

Section  II  of  the  joint  resolution  of  July  22,  1876,  recited  that  the  trade 
dollar  should  not  thereafter  be  legal  tender  and  that  the  Secretary  of  the 
Treasury  should  be  authorized  to  limit  the  coinage  of  the  same  to  an  amount 
sufficient  to  meet  the  export  demand  for  it.  The  act  of  March  3,  1887,  re- 
tired the  trade  dollar  and  prohibited  its  coinage ;  that  of  September  26,  1890, 
discontinued  the  coinage  of  the  i-dollar  and  3-dollar  gold  pieces. 

The  act  of  February  28,  1878,  directed  the  coinage  of  silver  dollars  of 
the  weight  of  412  1-2  grains  troj'.  of  standard  silver,  as  provided  in  the  act  of 
January  18,  1837,  and  that  such  coins,  with    all    silver    coins    theretofore 

coined,  should  be  legal  tender  at  their  nominal  value  for  all  debts  and  dues, 
public  and  private,  except  where  otherwise  expressly  stipulated  in  the  con- 
tract. 

The  Secretary  of  the  Treasury  was  authorized  and  directed  by  the  first 
section  of  the  act  to  purchase  from  time  to  time  silver  bullion  at  the  market 


SMITH'S  FINANCIAL  DICTIONARY. 


363 


price  thereof,  not  less  than  $2,000,000  worth  nor  more  than  $4,000,000  worth 
per  month,  and  to  cause  the  same  to  be  coined  monthly,  as  fast  as  purchased, 
into  such  dollars.  A  subsequent  act,  that  of  July  14,  1890,  enacted  that  the 
Secretary  of  the  Treasury  should  purchase  silver  bullion  to  the  aggregate 
amount  of  4,500,000  ounces,  or  so  much  thereof  as  might  be  offered,  each 
month,  at  the  market  price  thereof,  not  exceeding  $1  for  371.25  grains  of 
pure  silver,  and  to  issue  in  payment  therefor  Treasury  notes  of  the  United 
States,  such  notes  to  be  redeemable  by  the  government,  on  demand,  in  coin, 
and  to  be  legal  tender  in  payment  of  all  debts,  public  and  private,  except 
where  otherwise  expressly  stipulated  in  the  contract.  The  act  directed  the 
Secretary  of  the  Treasury  to  coin  each  month  2,000,000  ounces  of  the  silver 
bullion  purchased  under  the  provisions  of  the  act  into  standard  silver  dol- 
lars until  the  ist  day  of  July,  1891,  and  thereafter  as  much  as  might  be 
necessary  to  provide  for  the  redemption  of  the  Treasury  notes  issued  under 
the  act.  The  purchasing  clause  of  the  act  of  July  14,  1890,  was  repealed  by 
the  act  of  November  i,  1893. 

The  act  of  June  9,  1879,  made  the  subsidiary  silver  coins  of  the  United 
States  legal  tender  to  the  amount  of  $10.  The  minor  coins  are  legal  tender 
to  the  amount  of  25  cents. 

The  weight,  fineness,  etc.,  of  the  coins  of  the  United  States  are  as 
follows : 

GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Value. 


Double  eagle    ($20) 

Eagle    ($10) 

Half  eagle    (S5) 

Quarter  eagle  ($2.50) 

One  dollar   Cno  longer  coined) 


Grains. 

516.0000 

258.0000 

129.0000 

64.5000 

25.8000 


l.OOOths      Grains. 
9O0I464.4OOO 


900 
900 
900 
900 


232.2000 

1 16.1000 

58.0500 

23.2200 


$20.00 

10.00 

5.00 

2.50 

1. 00 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Value. 


Dollar    

Half  dollar... 
Quarter  dollar 
Dime   


Grains. 

412.5000 

I92.QOOO 

96.4500 

38.5800 


lOOOths       Grains. 

9001371.2500 

900I  173.6100 

900 1    86.8050 

900 1    34. 7220 1 


$1.00 

•50 

•25 
.10 


MINOR  COINS. 


Denomination. 

Weight. 

Composition. 

Weight. 

Legal  tender. 

Value. 

Nickel. 
5  cents 

Grams. 

75  per  cent   cop- 
per and  25  per 
cent  nickel. 

95  per  cent  cop- 
ner,  3  per  cent 
tin,   and   2   per 
cent  zinc. 

Grains. 
77.1600 

48.0000 

To       the 
-  amount    of 
25  cents. 

1   $o.o=;oo 

Bronze. 
I    cent 

.0100 

364 


SMITH'S  FINANCIAL  DICTIONARY. 


The  following  table  shows  the  authority  for  coining   and  for  changing 
the  weight  and  fineness  of  the  coins  of  the  United  States : 


Denomination. 


Gold   coins. 

Double  eagle   ($20) 
Eagle    ($10) 


Half  eagle    ($5) 


Quarter  eagle  ($2.50) 


Tnree-dollar  niece. 
One  dollar 


Silver  coins. 


Dollar 


Act  authorizing 

coinage  or  change 

in  weight  or 

fineness. 


March  3,  1849.  .. 
April  2,  1792.  . . . 
June  28,  1834. . . 
January  18,  1837. 


1792.... 
1834. ••• 
18,  1837. 


Trade  dollar 

Lafayette   dollar. 
Half  dollar 


Columbian  half  dollar 
Quarter  dollar 


quarter 


April  2, 
June  28, 
January 

April  2,  1792.  . . . 
June  28,  1834.  . .. 
January  18,  1837, 
February  2i,iS>3 
March  3,  1849.  . . 


April  2,  1792 

January  18,  1837. 
February  28,1878. 

July  14,  1890 

February  12,1873. 
March  3,   1899.  .. 

April  2,  1792 

January  18,  1837- 
February  21,1553. 
February  12,1873. 
August  S,  1892.  . 
•\pril  2,  1792.  ..  . 
January  18,  1837. 
February  21,18^3. 
February  12,1873 


■Columbian 

dollar.  . . 

Twenty-cent  piece. . 

Dime    


Half  dime 


Three-cent  piece.  . . . 

Minor  coins. 

Five-cent  (nickel) . . 
Three-cent  (nickel) 
Two- cent  (bronze)  . 
Cent    (coDper) 


Cent    (nickel) 

Cent   (bronze) 

Half  cent   (copper) 


Weight 
ferains) . 


March  3, 
March  3, 
April  2,  I 
January  I 
February 
February 
April  2,  I 
January  i 
February 
March  3, 
March  3, 


1893... 

1875. •• 
792.... 

8,  1837- 
21,1853. 
12,1873. 
792.... 

8,  1837. 
21,1853. 

1851... 

1853- •• 


May  16,  1866 

March  3,  1865. . . 
April  22,  1864. . . 

April  2,  1792 

January  14,  1793. 
Jan.  26.  1796  (c) 
February  21,1857. 
April  22,  1864. .  . 
April  2,  1792.  . .  . 
January  14,  1793. 
Jan.  26.  1796  (c) 


516 
270 
258 

135 
129 


Fineness. 


67-5 
64-5 


774 
25.8 


416 

4121/^ 


.900 

.9 1 61 

.899225 

.900 

■9i6f 

.899225 

.900 

.916I 

.899225 

.900 

.900 

.900 


.8924 
.900 


Act  discontinuing 
coinage. 


420 

4121^ 

208 

206  54 

192 

192.9 

192.9 

104 

I03>^ 
96 
96.45 

96.45 

77.16 

41.6 

41^/4 

38.4 

38.58 

20.8 

205^ 

19.2 

12^ 
11.52 


77.16 

30 

96 
264 
208 
168 

72 

48 
132 
104 

84 


.900 
.900 

.8924 
.900 


Sept.  26,  1890. . . 
Sept.  26,  1890. . . 


February  12,  1873 
March  3,  1887. 


.900 

■S924 
.900 


.900 
.900 
.8924 
.900 


.8924 
.900 


May  2,  1878. 


•750 
.900 


(a) 
(a) 
Cb) 


(d) 
(b) 


February  12,  1873 
February  12,  1873 


Sept.  26,  1890. .. 
February  12, 1873 


February  21,  1857 
April  22,  1864. 


February  21,  1857 


SMITH'S  FINANCIAL  DICTIONARY. 


365 


Notes  to  table  on  preceding  page. 

(a)  Composed  of  75  per  cent  copper  and  25  per  cent  nickel. 

(b)  Composed  of  95  per  cent  copper  and  5  per  cent  tin  and  zinc. 

(c)  By  proclamation  of  the  President,  in  conformity  with  act  of  March 
3,  1795- 

(d)  Composed  of  88  per  cent  copper  and  12  per  cent  nickel. 

URUGUAY. 

This  country  has  the  single  gold  standard.  The  unit  is  the  gold 
peso  of  1.697  grams,  .916  2-3  fine,  its  value  being  $1.08.04.  The  silver 
peso  is  of  25  grams  .900  fine  and  is  therefore  equal  to  the  French  silver 
5-franc  piece.  Smaller  coins  are  exact  subdivisions  and  are  of  the  denom- 
inations of  50,  20  and  10  centesimos.  United  States,  British  and  some 
other  European  gold  coins  circulate. 

VENEZUELA. 

The  unit  is  the  silver  venezolano  or  peso,  divided  into  100  centavos. 

The  ratio  of  gold  to  silver  is  i  to  15  1-2.  The  only  difference  between 
the  French  monetary  system  and  that  of  Venezuela  is  that  whereas  the 
French  5-franc  piece  is  unlimited  legal  tender  the  5-bolivar  piece  or  ven- 
ezolano is  legal  tender  only  to  the  amount  of  500  bolivars  or  about  $100 
in  United  States  gold  coin.  In  this  respect  Venezuela  is  more  like  a  single 
gold  standard  country.  It  is,  however,  generally  classed  as  a  double  stan- 
dard country. 

The  weight,  fineness,  etc.,  of  the  coins  of  Venezuela  are  as  follows : 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value  in 
United  States 
gold  coin. 


100  bolivars 
50  bolivars. 
20  bolivars. 
10  bolivars. 
5   bolivars.  . 


Grains. 
32.2S80 

16.1290 
6.4516 
3-2258 
I. 6129 


l,000ths  I  Grains. 
900129.0322 
900]  14.5 161 
900 


900 
900 


Grains.    \    Grains. 
497.81 78 1 448. 0360 
224.0180 
89.6072 


248.9089 

■;.8o64l  995635 
2.9032 1  49.7817 
1.45161  24.8908 


44.8036 
22.4018 


$19.2952 

9.6476 

3-8590 

1.9293 

.9647 


SILVER. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 


5   bolivars.  . . 
2   bolivars.  . . 

Bolivar 

Half  bolivar. 
Fifth  bolivar 


Grants. 

i.OOOths 

25.0000 

900 

10.0000 

835 

5.0000 

83  = 

2.5000 

835 

1. 0000 

835 

Grams.  \  Grains.  \  Grains. 
22.5OO0I385.8089I347.2280 
8.35001154.32351128.8601 
4.I750I  77. 161 7I  64.4300 
2-0875 1  38.5808 1  32.2150 
■8350I    15-43231    12.8860 


Value  com- 
pared with 
silver  in 
United  States 
silver  dollar. 


$0.9352 
-3470 
■1735 
.0867 
•0347 


366  SMITH'S  FINANCIAL  DICTIONARY. 

Money  to  move  the  crops.  This  term  means  the  money 
employed  to  pay  for  the  crops  when  they  are  taken  out  of  the 
hands  of  the  farmers  and  sent  to  the  general  markets. 

At  the  seasons  of  the  year  when  the  grain  and  cotton  crops 
are  ready  for  sale  large  amounts  of  money  are  usually  shipped 
from  the  great  money  centres  to  the  districts  where  the  crops 
are  raised.  When  the  farmers  (and  planters,  as  growers  of 
cotton  are  called)  have  been  paid  for  their  products  and  they 
in  turn  pay  ofif  their  own  debts  or  make  purchases  which 
have  been  postponed  until  the  receipt  of  the  money  or  when 
they  deposit  the  money  in  the  local  banks  it  begins  to  flow 
back  to  the  money  markets,  where  it  finds  employment  and 
earns  interest  until  needed  to  move  the  next  crops. 

The  movement  of  money  from  New  York  and  other  Eastern 
financial  centres  to  the  great  grain  producing  regions  of  the 
West,  Northwest  and  Southwest  and  to  the  cotton  producing 
regions  of  the  South  and  Southwest  is  an  important  annual 
occurrence.  It  usually  begins  the  latter  part  of  August  and 
continues  until  the  fore  part  of  November  and  it  is  not  until 
December  that  it  begins,  in  any  volume,  to  return  to  New 
York  and  the  other  Eastern  financial  centres. 

There  is,  in  the  first  place,  a  need  for  money  by  the  farmers 
who  grow  grain  and  by  the  planters  who  grow  cotton  to  pay 
their  hands ;  but  the  large  need  for  money  is  to  pay  the  farmers 
for  their  grain  and  the  planters  for  their  cotton.  The  farmers 
and  the  planters  borrow  from  their  local  banks  to  pay  their 
hands  and  the  shippers  who  buy  from  the  farmers  and 
planters  also  borrow  from  the  local  banks  to  make  payment  to 
the  farmers  and  the  planters. 

The  local  banks  send  to  the  banks  in  New  York  and  else- 
where in  the  East  for  money.  The  local  banks  may  have 
balances  to  their  credit  in  the  New  York  and  Eastern  banks, 
in  which  case  they  obtain  money  that  belongs  to  them.  Often 
they  rediscoimt  paper  (promissory  notes  and  drafts)  with  the 
New  York  and  Eastern  banks — that  is,  they  resell  paper  which 
they  themselves  had  bought  and  thus  obtain  money.  The 
local  banks  may  obtain  money  from  banks  in  large  cities  near 
at  home  in  the  West  and  South,  but  in  such  a  case  the  banks 
from  which  they  obtain  money  turn  to  the  New  York  and  other 
Eastern  banks  to  replenish  their  own  supplies  so  that  the  re- 


SMITH'S  FINANCIAL  DICTIONARY.  367 

suit  is  the  same  as  if  the  local  banks  had  themselves  obtained 
the  money  direct  from  the  New  York  and  Eastern  banks. 

The  effect  is  to  denude  New  York  and  other  Eastern  centres 
of  money.  The  banks  in  these  centres  have  to  deny  their  reg- 
ular borrowers,  or  at  least  curtail  the  accommodation  extended 
to  them,  and  in  addition  they  have  to  demand  the  return  of 
call  money  (money  loaned  for  an  indefinite  period,  which  is 
subject  to  return  on  the  demand  of  the  lender).  The  result  is  a 
scarcity  of  mone}^  for  general  business  and  also  for  specula- 
tive operations.  Naturally  rates  advance  and  both  business 
and  speculation  are  restricted. 

Most  of  the  money  sent  from  New  York  to  the  West  and 
South  is  forwarded  in  three  ways.  One  way  is  for  a  bank 
in  New  York  to  deposit  money  in  the  Sub-Treasury  in  New 
York  which  orders  by  telegraph  the  Sub-Treasury  in  Chicago 
or  New  Orleans  to  pay  it  out  to  the  banks  for  which  it  is  in- 
tended. (Each  order  for  the  transfer  of  money  is  first  sent  to 
the  Treasury  in  Washington  and  is  then  repeated  to  the  Sub- 
Treasury  which  is  to  make  payment).  Another  way  is  to  for- 
ward the  money  by  express  and  a  third  way  is  to  send  by  reg- 
istered mail.  The  larger  part  of  the  money  is  perhaps  for- 
warded by  express.  The  methods  of  forwarding  money  from 
other  Eastern  centres  are  the  same  except  that  it  cannot  be 
transferred  through  Sub-Treasuries  from  points  where  there 
are  not  Sub-Treasuries. 

The  chief  requirement  in  moving  the  crops  is  for  money  of 
small  denominations  and  the  consequence  in  some  years  has 
been  almost  a  famine  in  small  bills  (money  of  small  denomina- 
tions) in  New  York  and  elsewhere  in  the  East. 

When  money  begins  to  return  from  the  West  and  South  a 
relaxation  in  money  ensues  at  Ncav  York  and  the  other  East- 
ern centres. 

Monometalism.  Exists  in  a  country  when  the  currency  of 
the  country  is  based  on  a  single  metal,  as  either  gold  or  silver, 

Month.  In  business  a  month  is  usually  considered  as  con- 
sisting of  30  days. 

In  time  loans  (loans  running  for  a  specified  time)  30  days 
are  counted  as  a  month.  In  call  loans,  however,  interest  is 
calculated  for  the  number  of  days  they  actually  run. 

In   dealing   in   futures    (contracts   maturing   in    the   future) 


368  SMITH'S  FINANCIAL  DICTIONARY. 

in  grain,  cotton,  coffee,  etc.,  it  is  the  practise  to  designate 
the  contracts  by  the  names  of  the  months  in  which  they 
mature.  Thus,  wheat  sold  for  delivery  in  January  is  called 
January  wheat;  cotton  sold  for  delivery  in  July  is  called  July 
cotton,  and  so  on. 

Monthly  crop  report.  See  Government  crop  report ;  also 
see  Weather-crop  report. 

Moratorium.  An  emergency  act  of  legislation  authorizing 
a  government  bank  to  suspend  or  defer  specie  payments  for  a 
given  period.  The  term  also  is  loosely  applied  to  an  edict  by 
a  government  permitting  a  delay  for  a  specified  period  in  the 
payment  of  public,  corporate    or  even  private  debts. 

Mortgage.  A  mortgage  is  a  lien  or  a  conveyance  for  the 
security  of  a  debt,  which  becomes  void  upon  the  payment  of 
the  debt.     For  additional  information  see  Bond. 

Mortgage  deed.     A  deed  held  as  a  mortgage.    ■ 

Mortgagee.  The  grantee  under  a  mortgage ;  the  one  to 
whom  the  mortgage  is  executed. 

Mortgagor.     The  one  who  mortgages  property. 

Motive  power.  The  motive  power  of  a  railroad  consists  of 
its  locomotives. 

Movable  exchange.  If  foreign  exchange  is  quoted  and  also 
is  payable  in  the  money  of  the  country  where  collection  is  to 
be  made  it  is  called  movable  exchange.  For  instance,  ex- 
change on  Paris  is  quoted  in  francs  in  New  York  and  is 
therefore  movable  exchange.  The  dollar  is  the  basis  and  the 
franc  fluctuates  instead  of  the  dollar  in  which  it  is  reckoned. 

The  opposite  of  movable  exchange  is  fixed  exchange ;  see 
Fixed  exchange. 

Movement  of  gold.  The  export  and  import  movement  of 
gold.     See  Gold  exports  and  imports. 

Moving  the  crops.  Taking  them  out  of  the  hands  of  the 
farmers  and  sending  them  to  general  markets.  For  additional 
information  see  Money  to  move  the  crops. 

MTG.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  mortgage,  as  first  mortgage  bonds,  second  mort- 
gage bonds,  etc. 

Municipal  bonds.  Those  issued  by  a  borough,  town  or 
city  possessed  of  a  charter  of  incorporation  conferring  privi- 
leges of  local  self-government. 


SMITH'S  FINANCIAL  DICTIONARY.  369 

Mutual  deposits  on  a  contract.  In  any  contract  on  an  ex- 
change eitlier  broker  party  to  it  may  call  at  any  time  dur- 
ing the  continuance  of  it  for  a  mutual  deposit  (a  deposit  by 
both)  of  (usually)  10  per  cent.  If  the  market  price  of  the 
security  or  commodity  covered  by  the  contract  changes  so  as 
to  reduce  the  margin  of  either  party  below  5  per  cent  the 
other  party  may  demand  a  restoration  of  the  impaired  margin 
to  10  per  cent.  This  demand  may  be  repeated  as  often  as  the 
margin  is  reduced. 

Mutual  savings  bank.  A  mutual  savings  bank  is  one  con- 
ducted wholly  for  the  benefit  of  the  depositors,  who  receive  in 
the  form  of  interest  all  profits  over  and  above  necessary  ex- 
penses and  a  moderate  part  of  the  profits  set  aside  in  a  sur- 
plus fund  to  provide  for  unex'pected  losses  or  contingencies. 


N 


'N.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  new    or  north. 

Name.  London  Stock  Exchange  term ;  a  memorandum  is- 
sued by  a  purchasing  broker  giving  the  name,  address  and  de- 
scription of  his  client  to  whom  the  stock  bought  is  to  be  trans- 
ferred.    See  Name  day. 

Name  day.  Same  as  ticket  day ;  the  third  day  of  the  fort- 
nightly settlement  on  the  London  Stock  Exchange,  when  the 
purchasing  broker  (as  distinguished  from  the  jobber)  passes 
(hands)  to  the  jobber  who  made  the  sale  a  ticket  (memoran- 
dum) bearing  the  name,  address  and  description  of  the  per- 
son to  whom  the  stock  is  to  be  transferred  and  also  stating 
the  name  of  the  stock  exchange  firm  which  will  pay  for  the 
stock  on  delivery.  The  ticket  is  passed  on  until  it  arrives  in  the 
hands  of  the  broker  who  originally  sold  the  stock,  who  is  thus 
enabled  to  draw  up  the  transfer  deed   (as  the  certificate  of 


370  SMITH'S  FINANCIAL  DICTIONARY. 

transfer  or  assignment  is  called)  and  deliver  it  to  the  actual 
buyer.    See  Passing  a  name. 

Naming  a  price.  The  commoner  expression  is  making  a 
price  ;  see  Making  a  price. 

Napoleon.  A  colloquial  name  for  the  20-franc  gold  piece 
of  France,  equal  to  $3,85.90;  the  name  is  derived  from  a  cor- 
responding coin  that  was  issued  under  the  empire. 

National  bank.  A  bank  deriving  its  authority  to  do  busi- 
ness from  the  Federal  government ;  its  charter  is  obtained 
from  the  Comptroller  of  the  Currency. 

The  present  national  banking  system  was  the  outcome  of 
the  financial  requirements  of  the  government  in  the  Civil  War, 
when  it  was  found  necessary  to  create  a  market  for  United 
States  bonds.  Most  of  the  state  banks  had  suspended  specie 
payments  and  it  was  difBcult  for  the  government  to  borrcv 
money. 

The  National  bank  act  was  passed  on  February  25,  1863,  and 
was  radically  amended  in  the  following  year.  It  provided  for 
the  incorporation  of  banks  under  Federal  supervision  with  a 
minimum  capital  of  $50,000.  The  life  of  each  institution  was 
limited  to  20  years  and  it  was  permitted  to  use  the  word  "na- 
tional" as  part  of  its  title,  while  other  banks  were  prohibited 
from  using  the  word.  Each  bank  was  compelled  to  invest  at 
least  $30,000  of  its  capital  in  United  States  bonds,  in  consid- 
eration of  which  it  was  privileged,  by  depositing  the  bonds 
with  the  Treasurer  of  the  United  States,  to  issue  circulating 
notes  (known  as  national  bank  notes)  to  an  amount  equal  to 
90  per  cent  of  the  par  value  of  the  bonds  so  deposited. 

In  practise  the  operation  of  the  law  was  so  slow  that  the 
government  derived  little  immediate  benefit  from  the  sale  of 
bonds  for  note  securit}^,  the  total  amount  taken  for  that  pur- 
pose up  to  April,  1865,  being,  in  round  numbers,  only  $100,- 
000,000.  Other  and  great  benefits  did  arise,  however,  in  the 
unification  of  the  banking  system  and  the  establishment  of  a 
careful  and  exacting  government  supervision.  As  soon  as 
the  first  diflficulties  of  administration  had  been  overcome 
banks  began  to  come  in  rapidly  and  by  the  close  of  1865  over 
1,500  charters  had  been  granted — more  than  the  total  number 
of  all  banks  in  operation  in  the  United  States  three  years  be- 
fore. 


SMITH'S  FINANCIAL  DICTIONARY.  371 

Since  then  the  growth  of  the  system  has  been  steady  and 
the  operation  of  the  law  on  the  whole  satisfactory.  From  time 
to  time  amendments  have  been  made  to  the  law  as  imperfec- 
tions and  inadequacies  developed.  By  the  gold  standard  act  of 
March  14,  igoo,  the  minimum  authorized  capital  for  national 
banks  was  reduced  to  $25,000  and  permission  was  given  to  is- 
sue circulating  notes  to  the  par  value  of  the  bonds  deposited 
for  security. 

The  weakest  point  in  the  system  has  always  been  that  re- 
lating to  the  issue  of  circulating  notes.  The  high  prices  at 
which  United  States  bonds  have  sold  and  the  taxes  and  other 
expenses  attached  to  the  issuing  of  the  notes  all  combined  to 
make  the  operation  nearly  profitless.  In  fact  many  banks 
made  the  required  deposit  of  bonds  without  taking  out  cir- 
culation rather  than  go  through  all  the  labor  involved  for  a 
nominal  profit.  The  gradual  extinction  of  the  public  debt  has 
also  operated  to  contract  bank  circulation  and  will  eventually 
extinguish  it  unless  authority  is  given  to  the  banks  to  issue 
currency  against  their  general  assets.  Some  of  the  plans  ad- 
vanced for  attaining  this  end  will  be  found  under  the  head 
Asset  currency. 

The  places  in  which  national  banks  are  situated  are  divided 
into  three  classes — places  that  are  not  reserve  cities,  reserve 
cities  and  central  reserve  cities.  Places  that  are  not  reserve 
cities  comprise  the  greater  number.  National  banks  in  these 
places  are  unofficially  designated  as  country  banks  and  are 
required  to  maintain  in  cash  a  reserve  of  (keep  on  hand)  15 
per  cent  of  the  amount  on  deposit  with  them,  three-fifths 
of  which  reserve  may  be  deposited  by  them  in  banks  in  reserve 
or  central  reserve  cities.  Reserve  cities  are  cities  of  more 
irrtportance,  at  least  as  financial  centres,  than  the  places  that 
are  not  reserve  cities.  National  banks  in  reserve  cities  are 
designated  as  reserve  banks  and  must  maintain  a  reserve  of 
25  per  cent  of  their  deposits,  one-half  of  which  may  be  de- 
posited in  banks  in  central  reserve  cities.  Central  reserve 
cities  are  the  chief  financial  centres,  of  which  New  York  is 
foremost.  National  banks  in  these  cities  are  designated  as 
central  reserve  banks  and  must  maintain  a  reserve  of  25  per 
cent. 


372  SMITH'S  FINANCIAL  DICTIONARY. 

Reserve  cities  are  Albany,  Baltimore,  Boston,  Brooklyn, 
Cincinnati,  Cleveland,  Columbus,  Denver,  Des  Moines,  Detroit, 
Houston,  Indianapolis,  Kansas  City,  Kan.,  Kansas  City,  Mo., 
Lincoln,  Los  Angeles,  Louisville,  Milwaukee,  Minneapolis, 
New  Orleans,  Omaha,  Philadelphia,  Pittsburg,  Portland,  Ore. ; 
St.  Joseph,  St.  Paul,  San  Francisco,  Savannah,  Washington. 
Central  reserve  cities  are  Chicago,  New  York,  St.  Louis. 

Under  the  National  bank  act  the  maximum  amount  which  a 
national  bank  may  loan  to  any  one  person,  firm  or  corpo- 
ration is  an  amount  equal  to  lo  per  cent  of  its  capital,  but  the 
discount  of  bills  of  exchange  drawn  against  actual  values  and 
the  discount  of  commercial  or  business  paper  actually  owned 
by  the  person  negotiating  it  is  not  considered  as  money  bor- 
rowed. 

For  additional  information  see  National  bank  act. 

National  bank  act.  Section  i  of  the  act  of  June  20,  1874, 
provides  that  the  act  entitled  "An  act  to  provide  for  a  national 
currency  secured  by  "a  pledge  of  United  States  bonds,  and  to 
provide  for  the  circulation  and  redemption  thereof,  approved 
June  3,  1864,  shall  be  known  as  the  'National  bank  act.'  " 

Following  are  the  main  features  of  the  National  bank  act,  as 
amended,  and  of  other  laws  relating  to  national  banks : 

The  currency  bureau  in  the  Treasury  Department  is  charged 
with  the  execution  of  laws  relating  to  the  issue  and  regulation 
of  national  currency  (national  bank  notes).  The  chief  officer 
of  this  bureau  is  the  Comptroller  of  the  Currency,  who  performs 
his  duties  under  the  general  direction  of  the  Secretary  of  the 
Treasury.  He  is  appointed  by  the  President;  his  term  of  office 
is  five  years,  and  his  salary  is  $5,000  a  year.  He  is  not  per- 
mitted to  have  any  interest  in  a  national  bank. 

Any  number  of  persons,  not  less  than  five,  may  organize  a 
national  bank,  subject  to  the  approval  of  the  Comptroller  of 
the  Currency.  The  term  of  existence  of  a  national  bank  is 
twenty  years,  but  the  term  may  be  renewed  for  another  twenty 
years  as  often  as  it  expires.  A  capital  of  not  less  than  $200,000 
is  required  in  a  city  with  a  population  exceeding  50,000;  a 
capital  of  not  less  than  $100,000  is  required  in  a  city  with  a 
population  between  6,000  and  50,000.;  a  capital  of  not  less  than 
$50,000  is  required  in  a  place  with  a  population  between  3,000 


SMITH'S  FINANCIAL  DICTIONARY.  373 


and  6,000,  and  a  capital  of  not  less  than  $25,000  is  required  in  a 
place  with  a  population  not  exceeding  3,000.  The  stock  must  be 
in  shares  of  $100  each.  A  national  bank  must  deposit  with  the 
Treasurer  of  the  United  States  as  security  for  its  circulating 
notes  an  amount  of  United  States  registered  bonds  not  less 
than  one-fourth  of  its  capital  where  the  capital  is  $150,000  or 
less  and  must  deposit  not  less  than  $50,000  in  bonds  where  the 
capital  is  in  excess  of  $150,000. 

Every  director  of  a  national  bank  must  be  the  owner  in  his 
own  name  of  at  least  ten  shares  of  stock  and  one  of  the  direc- 
tors must  be  president  of  the  board. 

Any  state  bank  may  become  a  national  bank  and  the  shares 
of  its  capital  stock  may  continue  to  be  for  the  same  amount  as 
they  were  before  its  conversion  into  a  national  bank,  but  the 
capital  cannot  be  for  a  less  amount  than  prescribed  for  a  bank 
organized  under  the  National  bank  act.  A  converted  state 
bank  having  branches  may  retain  and  keep  in  operation  its 
branches. 

For  the  contracts,  debts  and  engagements  of  a  national  bank 
the  stockholders  are  individually  responsible  to  the  extent  of 
their  holdings  of  stock  at  its  par  value  in  addition  to  the 
amount  invested  in  the  stock,  except  that  shareholders  of  a  con- 
verted state  bank  with  a  capital  of  not  less  than  $5,000,000  paid 
in  and  a  surplus  of  20  per  cent  on  hand  are  liable  only  to  the 
amount  of  their  shares. 

A  national  bank  is  entitled  to  receive  from  the  Comptroller 
of  the  Currency  and  issue  circulating  notes  equal  in  amount  to 
the  par  value  of  United  States  bonds  deposited  with  the  Treas- 
urer. The  amount  of  such  notes,  however,  cannot  exceed  the 
amount  of  the  bank's  capital.  The  bank  must  keep  on  deposit 
with  the  Treasurer  an  amount  of  lawful  money  equal  to  5  per 
cent  of  its  circulation  (circulating  notes)  for  the  redemption  of 
its  notes.  On  the  retirement  (withdrawal)  by  a  bank  of  any 
part  of  its  circulation  United  States  bonds  for  an  equal  amount 
on  deposit  with  the  Treasurer  are  restored  to  it,  except  that 
the  amount  of  bonds  deposited  to  secure  circulation  can- 
not be  reduced  below  the  amount  required  to  be  deposited  in 
accordance  with  its  capital.  Circulation  is  retired  by  deposit- 
ing with  the  Treasurer  an  equal  amount  of  lawful  money  for 


374  SMITH'S  FINANCIAL  DICTIONARY. 

its  redemption.  The  Treasurer  is  not  permitted  to  receive  in 
any  one'calendar  month  more  than  $3,000,000  in  lawful  money- 
altogether  for  the  retirement  of  circulation. 

Circulating  notes  of  national  banks  may  be  presented  in 
sums  of  $1,000  or  multiples  to  the  Treasurer  of  the  United 
States  for  redemption.  United  States  notes  (greenbacks)  are 
delivered  in  exchange  for  the  bank  notes. 

A  national  bank  pays  in  January  and  again  in  July  a  duty 
(tax)  of  1-2  per  cent  on  the  average  amount  of  its  notes  in  cir- 
culation, except  that  the  duty  is  only  1-4  per  cent  when  the 
notes  are  secured  by  deposit  of  United  States  bonds  which  bear 
interest  at  only  2  per  cent.  The  bank  makes  a  report  on  Decem- 
ber I  and  again  on  June  i  of  the  average  amount  of  its  notes  in 
circulation  in  the  preceding  six  months.  A  tax  of  10  per  cent  is 
imposed  on  notes  issued  by  a  state  bank  or  any  bank  not  oper- 
ating under  the  National  bank  act  and  on  notes  issued  by  an 
individual,  firm  or  corporation.  [The  effect  of  this  heavy  tax 
is  to  prohibit  the  issuance  of  circulating  notes  except  by 
national  banks]. 

A  national  bank  in  a  central  reserve  city  must  keep  on  hand 
in  lawful  money  a  reserve  of  25  per  cent  (an  amount  equal  to 
25  per  cent  of  its  deposits)  ;  a  national  bank  in  a  reserve  city 
(as  distinguished  from  a  central  reserve  city)  must  keep  on 
hand  a  reserve  of  25  per  cent,  one-half  of  which  may  be  on  de- 
posit in  national  banks  in  central  reserve  cities ;  a  national 
bank  that  is  not  in  a  central  reserve  or  reserve  city  must  keep 
on  hand  a  reserve  of  15  per  cent,  three-fifths  of  which  may  be 
on  deposit  in  national  banks  in  central  reserve  or  reserve 
cities. 

'  Clearing  house  certificates  representing  specie  or  lawful 
money  deposited  may  be  counted  in  its  reserve  b}^  a  bank 
owning  such  certificates.  The  lawful  money  deposited  with 
the  Treasurer  of  the  United  States  for  the  redemption  of  its 
notes  (equal  to  5  per  cent  of  its  outstanding  notes)  may  be 
counted  in  its  reserve.  [A  national  bank  cannot  count  in  its 
reserve  national  bank  notes  whether  they  are  its  own  notes  or 
the  notes  of  other  national  banks]. 

A  city  with  a  population  of  50,000  may  be  made  a  reserve 
city  by  the   Comptroller  of  the  Currency  on   application  by 


SMITH'S  FINANCIAL  DICTIONARY.  375 

three-fourths  in  number  of  the  national  banks  in  that  city.  A 
city  with  a  population  of  200,000  may  in  like  manner  be  made  a 
central  reserve  city. 

The  interest  or  discount  rate  of  a  national  bank  must  not 
exceed  the  rate  allowed  by  law  in  the  state,  territory  or  district 
in  which  it  is  located.  Where  no  rate  is  fixed  by  law  the  bank's 
rate  cannot  exceed  7  per  cent. 

A  national  bank  may  declare  a  dividend  semi-annually. 
Before  declaring  a  dividend  it  must  carry  one-tenth  of  its  net 
profits  in  the  preceding  half-year  to  its  surplus  fund  until  this 
fund  amounts  to  20  per  cent  of  its  capital  stock. 

The  liability  of  a  person,  firm  or  corporation  to  a  national 
bank  for  money  borrowed  must  not  exceed  one-tenth  of  the 
bank's  capital.  But  the  discount  of  bills  of  exchange  drawn  in 
good  faith  against  actual  values  and  the  discount  of  com- 
mercial or  business  paper  actually  owned  by  the  person  negoti- 
ating it  is  not  considered  as  money  borrowed. 

A  national  bank  cannot  loan  money  on  or  purchase  shares  of 
its  own  stock. 

A  national  bank  must  not  pay  out  in  dividends  an  amount  in 
excess  of  its  net  earnings. 

A  debt  due  to  a  national  bank  on  which  interest  is  past  due 
and  unpaid  for  a  period  of  six  months,  unless  the  debt  is  well 
secured  and  is  in  process  of  collection,  is,  under  the  law,  a  bad 
debt. 

Impairment  of  the  capital  of  a  national  bank  must  be  made 
good  by  assessment  pro  rata  on  the  shareholders  within  three 
months  after  notice  to  do  so  has  been  received  from  the  Comp- 
troller of  the  Currency. 

A  national  bank  must  make  to  the  Comptroller  of  the  Cur- 
rency in  each  year  not  less  than  five  reports  of  its  condition. 
Each  report  must  be  of  the  condition  on  a  past  day  specified 
by  the  Comptroller  and  must  be  transmitted  to  the  Comptroller 
within  five  days  after  the  receipt  of  the  request  for  it.  The 
Comptroller  has  poAver  to  call  for  special  reports. 

vShares  of  the  capital  stock  of  a  national  bank  are  subject  to 
state  tax  in  the  state  where  the  bank  is  located,  but  the  tax 
must  not  be  at  a  greater  rate  than  is  imposed  on  other  moneyed 
capital  in  the  hands  of  individual  citizens  of  the  state;  shares 


376  SMITH'S  FINANCIAL  DICTIONARY. 

owned  by  non-residents  must  be  taxed  in  the  place  where  the 
bank  is  located.  The  real  property  of  a  national  bank  is  not 
exempt  from  state,  county  or  municipal  tax. 

The  Comptroller  of  the  Currency,  with  the  approval  of  the 
Secretary  of  the  Treasury,  may  appoint  national  bank  ex- 
aminers, who  have  power  to  investigate  the  affairs  of  national 
banks  and  to  examine  the  officers  and  agents  of  the  banks  on 
oath. 

A  bank  not  organized  under  the  national  currency  laws  or 
the  National  bank  act  cannot  use  the  word  "national"  as  part  of 
its  title,  unless  it  be  a  savings  bank  authorized  by  Congress  to 
use  the  word  "national". 

It  is  unlawful  to  imitate  national  bank  notes  for  advertising 
purposes. 

It  is  unlawful  for  an  officer,  clerk  or  agent  of  a  national  bank 
to  certif}^  a  check  unless  the  drawer  of  the  check  has  on  de- 
posit in  the  bank  at  the  time  of  certification  an  amount  of 
money  equal  to  the  amount  specified  in  the  check.  The  penalty 
for  false  certification  is  a  fine  of  not  more  than  $5,000  or  im- 
prisonment for  not  more  than  five  years  or  both.  False  cer- 
tification also  gives  to  the  Comptroller  of  the  Currency  power 
to  appoint  a  receiver  for  the  bank.  [The  prohibition  of  false 
certification,  or  overcertification  as  it  is  commonl}^  called,  is 
frequently  disregarded] . 

A  national  bank  may  be  designated  by  the  Secretary  of  the 
Treasury  as  a  depository  of  public  money,  except  receipts  from 
customs,  under  such  regulations  as  may  be  prescribed  by  the 
Secretary ;  it  may  also  be  employed  as  financial  agent  by  the 
government.  The  bank  must  give  satisfactory  security,  by 
the  deposit  of  United  States  bonds  and  otherwise,  for  the  safe 
keeping  and  prompt  payment  of  the  public  money  deposited 
with  it,  and  for  the  faithful  performance  of  its  duties  as  finan- 
cial agent  of  the  government. 

National  bank  examiner.  Appointed  by  the  Comptroller  of 
the  Currency,  with  the  approval  of  the  Treasurer  of  the  United 
States.  Charges  for  his  services  or  work  are  assessed  by 
the  Comptroller  upon  the  banks  examined. 

There  is  no  statute  which  makes  a  national  bank  examiner 
liable  for  losses  suffered  by  reason  of  an  embezzlement  which 
he  failed  to  discover. 


SMITH'S  FINANCIAL  DICTIONARY. '  577 

National  bank  note.  A  note  (money)  issued  by  a  national 
Ijank.  National  bank  notes  are  in  denominations  of  $5,  $10, 
$20,  $50,  $100,  $500,  $1,000.  Among  banks  these  notes  are  com- 
monly designated  as  circulation  to  distinguish  them  from  cur- 
rency (money  issued  by  the  government). 

National  banks  can  issue  only  notes  furnished  by  the  Fed- 
eral government.  Since  specie  payments  were  resumed  no 
bank  has  been  furnished  with  notes  of  a  smaller  denomination 
than  $5.  A  tax  of  i  per  cent  per  annum,  determined  semi-an- 
nually, is  imposed  by  the  government  on  national  bank  notes ; 
when,  however,  the  notes  are  secured  by  government  bonds 
bearing  interest  at  onlv  2  per  cent  the  tax  is  only  1-2  per  cent 
per  annum. 

National  bank  notes  are  a  legal  tender  to  any  and  all  na- 
tional banks  and  also  to  the  government,  except  for  duties  on 
imports,  and  they  are  tenderable  by  the  government  for  ail 
debts  except  interest  on  its  bonds.  They  are  redeemable  in 
'lawful  money"  or  legal  tender. 

To  secure  these  notes  the  banks  issuing  them  have  to  de- 
posit a  corresponding  amount  of  government  bonds  with  the 
Treasurer  of  the  United  States.  In  addition  they  are  required 
to  maintain  with  the  Treasurer  a  fund  equal  to  5  per  cent  of 
their  note  issues  for  the  redemption  of  such  notes  as  may  be 
presented  to  the  Treasurer.  This  5  per  cent  may  be  counted 
by  the  banks  in  their  reserves. 

A  national  bank  cannot  count  national  bank  notes  in  its  re- 
serve. Whether  it  holds  its  own  notes  or  the  notes  of  other 
banks  makes  no  difference ;  accordingly  it  is  the  rule  of  banks 
to  pay  out  national  bank  notes  ahead  of  other  kinds  of  money. 

When  a  national  bank  desires  to  retire  its  circulation  (its 
notes)  it  deposits  with  the  Treasury  money  to  the  amount  of 
the  circulation  to  be  retired.  The  Treasury  then  assumes  the 
obligation  of  redeeming  the  notes.  Some  of  them  will  be  sent 
in  for  redemption  because  they  are  worn  or'  mutilated  and 
those  which  are  received  by  other  national  banks  will  be  sent 
in  to  be  exchanged  for  some  form  of  legal  tender  money 
which  the  bank  can  include,  that  is,' count,  in  its  reserve.  Upon 
the  deposit  of  money  by  a  bank  to  redeem  its  circulation  the 
United  States  bonds  held  by  the  Treasurer  to  secure  the  circu- 


378  SMITH'S  FINANCIAL  DICTIONARY. 

lation  are  reassigned  to  it.    Redeemed  circulation  is  destroyed. 

A  national  bank  which  is  winding  up  must  deposit  money 
with  the  Treasurer  of  the  United  States  to  redeem  its  out- 
standing circulation,  except  when  winding  up  for  the  purpose 
of  consolidating  with  another  bank ;  in  such  a  case,  however, 
its  assets  and  liabilities  must  be  reported  by  the  bank  with 
which  it  is  in  process  of  consolidation. 

National  bank  report.  Five  reports  a  year  are  required  to 
be  mailed  to  the  Comptroller  of  the  Currency  by  each  national 
bank,  verified  under  oath  by  the  president  and  cashier  and 
attested  by  at  least  three  directors,  giving  in  detail  the  re- 
sources and  liabilities  of  the  bank  on  any  day  specified  by  the 
Comptroller.  When  the  Comptroller  calls  for  a  report  it  is  al- 
ways for  a  report  of  the  condition  of  the  bank  on  a  past  day 
and  not  on  a  future  day.  The  report  must  be  mailed  to  the 
Comptroller  within  five  days  after  request  is  made  for  it. 

National  bank  tax.  The  government  levies  an  annual  tax 
of  I  per  cent  on  the  circulation  of  a  national  bank  (the  tax  is 
only  1-2  per  cent  when  the  circulation  is  secured  by  deposit 
of  government  bonds  bearing  interest  at  only  2  per  cent). 
The  tax  is  collected  semi-annually  (January  and  July)  and  is 
based  on  the  average  amount  of  circulation.  The  shares  of  a 
national  bank  are  subject  to  a  state  tax  and  its  real  property 
is  subject  to  state,  county  or  municipal  tax. 

National  currency.  Another  name  for  national  bank  notes ; 
see  National  bank  note. 

National  debt.  Same  as  public  debt ;  the  debt  due  from  a 
nation  to  individual  creditors. 

The  national  debt  of  the  United  States  consists  of  bonds, 
United  States  notes  (greenbacks),  old  demand  notes  (notes 
issued  prior  to  the  present  United  States  notes),  national  bank 
notes  for  the  redemption  of  which  money  has  been  deposited 
by  the  issuing  banks,  fractional  currency,  gold  certificates. 
silver  certificates  and  Treasury  notes  (issvied  for  the  purchase 
of  silver  bullion). 

National  gold  bank.  National  gold  banks  were  authorized 
by  the  bank  act  of  1864  (for  the  Pacific  slope),  their  notes  to  be 
payable  in  gold  and  none  to  be  issued  of  a  denomination  less 
than  $5.     The  issuance  of  notes  was  limited  to-  80  per  cent  of 


SMITH'S  FINANCIAL  DICTIONARY.  379 

the  par  value  of  government  bonds  deposited  in  the  Treasury 
of  the  United  States.  The  act  of  February  14,  1880,  provided 
for  the  conversion  of  these  banks  into  regular  national  banks. 

National  loan.     An  issue  of  bonds  by  a  government. 

NB.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  new  bonds. 

Negotiable.  That  which  may  be  transferred  by  mere  de- 
livery or  by  assignment. 

Negotiable  instrument.  An  instrument  that  may  be  ne- 
gotiated ;  specifically,  in  law,  an  instrument  transferable  by  as- 
signment, indorsement  or  delivery. 

There  are  but  three  forms  of  negotial)le  instruments  in  com- 
mon use,  viz :  Check,  bill  of  exchange  (draft)  and  promis- 
sory note. 

An  instrument  to  be  negotiable  must  contain  an  uncondi- 
tional promise  or  order  to  pay  a  certain  sum  in  money ;  must 
be  payable  on  demand  or  at  a  fixed  or  determinable  future 
time ;  must  be  payable  to  order  or  to  bearer ;  and  when  the 
instrument  is  addressed  to  a  drawee  he  must  be  named  or  in- 
dicated therein  with  a  reasonable  certainty. 

An  instrument  which  contains  an  order  or  promise  to  do 
any  act  in  addition  to  the  payment  of  money  is  not  negotiable. 
But  the  negotiable  character  of  an  instrument  is  not  affected 
by  a  provision  which  authorizes  the  sale  of  collateral  securities 
in  case  of  failure  to  pay  at  maturity  or  authorizes  a  confession 
of  judgment  if  not  paid  at  maturity  or  waives  the  benefit  of  any 
law  intended  for  the  advantage  or  protection  of  the  obligor 
(the  one  upon  whom  the  obligation  to  pay  rests)  or  gives  the 
holder  the  privilege  of  requiring  something  to  be  done  in 
lieu  of  payment  of  money. 

The  validity  and  negotiable  character  of  an  instrument  are 
not  affected  by  the  fact  that  it  is  not  dated  or  does  not  specify 
the  value  given  or  that  any  value  has  been  given  or  does  not 
specify  the  place  where  drawn  or  where  payable  or  bears  a 
seal  or  designates  a  particular  kind  of  current  money  in  which 
payment  is  to  be  made. 

The  maker  or  drawer  or  the  payee  or  drawee  (the  one  who 
is  to  pay)  and  the  acceptor  may  be  the  same  person  and  if 
that  person  indorses  the  instrument  and  puts  it  in  circulation  it 
becomes  a  negotiable  instrument. 


380  SMITH'S  FINANCIAL  DICTIONARY. 

A  negotiable  instrument  can  be  enforced  for  its  full  amount 
against  the  maker  or  acceptor  regardless  of  any  offsetting 
claim. 

If  the  amount  stated  in  words  and  the  amount  stated  in 
figures  do  not  agree  the  words  govern. 

A  time  instrument  falling  due  on  Sunday  or  a  holiday  (iji- 
cluding  Saturday  where  Saturday  is  a  half-holiday)  is  payable 
on  the  next  business  day.  An  instrument  payable  on  demand 
is  payable  during  business  hours  on  a  Saturday  half-holiday. 

Also  see  Non-negotiable  instrument. 

Net.  Clear  of  all  charges  or  deductions,  as  actual  profit 
or  actual  loss.  The  net  earnings  of  a  stock  company  are  the 
earnings  left  after  deducting  expenses. 

Brokers  in  the  outside  or  curb  market  in  stocks  often  take 
an  order  net,  which  means  that  the  customer  will  deliver  or 
receive  the  stock,  as  the  case  may  be,  at  a  fixed  price.  The 
broker  receives  no  commission  but  is  allowed  to  make  as 
much  on  the  transaction  for  himself  as  he  can. 

Net  cash.  The  term  "net  cash,"  in  its  original  meanin;^, 
calls  for  payment  upon  delivery  of  the  goods.  In  many  mar- 
kets sellers  have  fallen  into  the  habit  of  allowing  to  buyers  for 
cash  lo  or  some  other  definite  number  of  days,  so  that  ''cash" 
is  interpreted  to  mean  payment  at  any  time  within  that  num- 
ber of  days.  Thus,  it  has  become  necessary  to  invent  another 
term  for  what  "cash"  formerly  meant  and  "net  cash"  or  "spot 
cash"  is  employed  for  this  purpose. 

"Cash"  with  or  without  the  accompanying  adjective  "net" 
or  "spot"  means  prompt  payment  upon  delivery  unless  tRe 
parties  to  the  contract  have  been  in  the  habit  of  interpreting  it 
in  some  other  sense  in  their  dealings  with  each  other  or  un- 
less the  common  market  usage  has  imparted  to  it  another 
meaning;  then,  some  other  word  must  be  found  to  signify 
prompt  payment. 

Net  earnings.  Earnings  which  remain  after  expenses  neces- 
sary to  secure  total  or  gross  earnings  have  been  deducted. 

Net  gold.  Same  as  free  gold ;  the  amount  of  gold  held  in 
the  Treasury  of  the  United  States  in  excess  of  the  sum  re- 
quired to  redeem  gold  certificates  outstanding.  Net  gold  if.- 
cludes  the  $150,000,000  gold  reserve. 


SMITH'S  FINANCIAL  DICTIONARY.  381 

Net  income.  Income  which  remains  after  expenses  and 
charges  of  all  kinds  have  been  deducted. 

Net  price.  The  price  after  deduction  of  all  discounts  or 
allowances. 

Net  profit.  What  is  left  after  all  expenses  have  been  de- 
ducted. 

Net  weight.  The  weight  after  allowance  for  or  removal  of 
extraneous  matter,  as  the  weight  of  material  after  its  removal 
from  the  receptacle  which  contained  it. 

New  account.  On  the  London  Stock  Exchange  the  new  ac- 
count begins  on  the  first  day  of  the  settlement.  On  this  day 
dealings  are  either  for  money  (immediate  settlement)  or  for 
the  account,  that  is  to  sa3^  for  the  next  settlement.  (See  For 
the  account).  On  other  days  for  the  new  account  means  for 
the  account  following  the  current  account. 

New  Tennessee.  An  exclamation  used  by  the  brokers  when 
a  new  member  first  appears  on  the  New  York  Stock  Exchange 
as  a  signal  for  his  "initiation,"  which  consists  in  hazing  him. 
The  exclamation  also  is  used  to  direct  attention  to  the  presence 
of  a  stranger  on  the  exchange. 

The  term  "New  Tennessee"  originated  in  the  refunding  in 
1883  by  the  state  of  Tennessee  of  its  old  defaulted  bonds.  New 
bonds  were  given  for  the  old  ones,  but  for  considerably  less 
than  the  face  value  of  the  old  bonds,  and  the  rate  of  interest 
on  the  new  bonds  also  was  less  than  the  rate  on  the  old  ones. 
The  conditions  of  exchange  of  the  old  bonds  for  the  new  ones 
were  unsatisfactory  and  "New  Tennessee,"  the  abbreviation 
for  the  new  bonds  of  the  state  of  Tennessee,  became  a  term  of 
derision.  It  soon  became  the  practise  to  shout  it  out  when  a 
new  member  of  the  exchange  made  his  first  appearance  on  the 
floor  or  when  a  stranger  eluded  the  vigilance  of  the  door- 
keepers and  wandered  upon  the  floor. 

The  corresponding  expression  on  the  London  Stock  Ex- 
chano-e  is  fourteen  hundred;  see  Fourteen  hundred. 

New  York  Clearing  House  Association.  The  official  title  of 
the  organization  under  which  the  associated  banks  of  New 
York  conduct  daily  clearings. 

The  association  was  organized  September  13,  1853,  and 
clearings  were  begun  on  October  11  in  the  basement  of  No.  14 
Wall  street.     The  first  dav's  clearings  amounted  to  $22,648,- 


382  SMITH'S  FINANCIAL  DICTIONARY. 

109.87  and  the  balances  to  $1,290,572.38.  The  number  of  banks 
making  clearings  was  52.  The  first  manager  was  George  D. 
Lyman,  who  had  been  a  teller  in  the  Bank  of  North  America. 
The  association  now  owns  and  makes  its  clearings  (or  ex- 
changes) in  a  handsome  white  marble  building  Nos.  79  to  83 
.  Cedar  street. 

For  an  explanation  of  the  method  of  making  clearings  (or 
exchanges)  and  settling  balances  see  Clearing  house  of  the 
associated  banks  of  New  York. 

New  York  Produce  Exchange.  The  place  in  New  York 
where  dealings  in  grain,  provisions,  etc.,  are  extensively  con- 
dvicted. 

New  York  Stock  Exchange.  The  New  York  Stock  Ex- 
cliange  is  an  unincorporated,  voluntary  association  and  while 
it  is  not  a  corporation  neither  is  it  a  partnership.  It  exists, 
however,  under  a  written  constitution  and  by-laws.  Neither 
the  constitution  of  the  New  York  Stock  Exchange  nor  the 
rules  and  regulations  of  the  London  Stock  Exchange  in  ex- 
press terms  state  the  object  for  which  those  bodies  were  or- 
ganized, but  they  are  so  manifest  that  a  statement  of  them  has 
not  been  deemed  essential. 

The  New  York  Stock  Exchange  had  its  origin  in  an  agree- 
ment dated  May  17,  1792,  by  "Brokers  for  the  Purchase  and 
Sale  of  Public  Stock."  By  public  stock  was  meant  government 
securities ;  in  other  words,  government  bonds.  At  that  time 
the  brokers  met  and  did  business  under  a  buttonwood  tree  that 
stood  in  front  of  the  dividing  line  between  the  present  Nos. 
68  and  70  Wall  street.  In  1817  a  constitution  was  adopted 
under  the  name  "New  York  Stock  and  Exchange  Board."'  On 
January  29,  1863,  the  present  name,  "New  York  Stock  Ex- 
change," was  adopted. 

The  membership  of  the  New  York  Stock  Exchange  is  limited 
to  1,100.  The  admission  fee  is  $2,000,  but  this  is  in  addition  to 
the  cost  of  a  membership  itself  which  depends  on  the  "state  of 
the  market"  for  seats,  as  memberships  are  called.  A  member- 
ship is  obtained  by  buying  the  seat  of  a  retiring,  deceased  or 
expelled  member.  A  member  is  elected  for  life  or  until  he  re- 
signs or  is  expelled. 

Expulsion  from  the  exchange  forfeits  membership,  but  not 
the  proceeds  of  it.    Temporary  insolvency  involves  suspension. 


SMITH'S  FINANCIAL  DICTIONARY.  383 

Permanent  insolvency  involves  loss  of  membership  and  the 
proceeds  of  the  membership  are  applied  to  the  payment  of  the 
claims  of  creditors  who  are  members  of  the  exchange.  If  there 
is  a  surplus  it  goes  to  the  member  or  to  his  assignee  if  he  has 
been  declared  a  bankrupt. 

When  a  member  dies  his  seat  may  be  disposed  of  by  the  com- 
mittee on  admissions  and  the  proceeds  delivered  to  his  execu- 
tor   or  the  administrator  of  his  estate. 

New  York  Stock  Exchange  clearing  house.  The  place 
where  the  differences  in  the  accounts  of  brokers  on  the  New 
York  Stock  Exchange  are  settled. 

Before  the  establishment  of  the  clearing  house  a  broker 
who  had  made  sales  of  stocks  was  obliged  to  send  the  stocks 
to  the  offices  of  the  various  purchasers  and  collect  payment 
fi;om  them.  At  the  same  time  brokers  from  whom  he  had 
bought  stocks  were  obliged  to  send  the  stocks  to  his  office  and 
collect  payment  from  him.  A  broker  may  have  made  sales  to 
the  amount  of  $500,000  and  purchases  to  the  amount  of  $475,- 
000.  He  was  compelled  to  make  collections  and  payments  for 
the  full  amounts,  whereas  under  a  clearing  house  plan  he  might 
have  settled  all  the  transactions  in  one  operation  and  by  the 
payment  of  only  the  difiference  of  $25,000. 

Now,  a  broker  at  the  end  of  each  day  makes  up  a  sheet  called 
a  clearing  house  sheet,  containing  his  purchases  and  sales.  On 
one  side  of  the  sheet  (the  left  hand  side)  the  broker  puts  down 
his  purchases,  each  purchase  having  a  line  for  itself.  In  each 
transaction  the  name  of  the  broker  from  whom  the  purchase 
was  made  comes  first  and  then  in  order  follow  the  number  of 
shares,  the  name  of  the  stock,  the  price  at  which  purchased, 
and  finally,  the  amount  in  dollars  of  the  purchase.  This  side  of 
the  sheet  is  headed  "Received  from,"  meaning  that  the  broker 
has  contracted  to  receive  the  stocks  enumerated. 

The  other  side  of  the  sheet  (the  right  hand  side)  contains 
the  list  of  stocks  sold  (made  out  in  the  same  order  as  the  list 
of  stocks  bought)  and  this  side  of  the  sheet  is  headed  "De- 
livered to,"  meaning  that  the  broker  has  contracted  to  deliver 
the  stocks  enumerated. 

If  his  purchases  amount  in  money  to  more  than  his  sales  he 
accompanies  his  sheet  with  a  check  drawn  on  his  own  bank 
and  payable  to  the  clearing  house  bank  (a  bank  in  which  the 


384  SMITH'S  FINANCIAL  DICTIONARY. 

clearing  house  account  is  kept).  If  his  sales  amount  in  money 
to  more  than  his  purchases  he  accompanies  his  sheet  with  a 
draft  on  the  clearing  house  bank,  which  is  accepted  by  the 
manager  of  the  clearing  house  (made  collectable  by  the  in- 
dorsement of  the  manager).  This  draft  is  returned  to  the 
broker  and  is  deposited  by  him  in  his  own  bank  for  collection 
in  the  ordinary  course. 

If  the  broker  has  bought  more  of  any  particular  stock  than 
he  has  sold  or  sold  more  than  he  has  bought  there  is  a  stock 
difference  (as  well  as  a  money  difference)  to  be  settled,  but  the 
settlement  of  this  stock  difference  is  provided  for  when  the 
sheet  is  made  up.  If,  for  instance,  the  broker  has  bought  200 
shares  of  a  certain  stock  and  has  sold  100  shares  he  receives 
th"  difference  or  balance  of  stock,  which  is  100  shares.  Some 
other  broker  who  sold  100  shares  more  of  the  stock  in  question 
than  he  bought  is  directed  by  the  manager  of  the  clearing  house 
to  deliver  this  extra  100  shares  to  the  first  broker.  The  first 
broker  credits  himself  on  his  sheet  with  the  amount  in  money 
of  the  stock  at  the  settling  price  while  the  second  broker 
charges  himself  with  the  amount  of  it  on  his  sheet. 

The  settling  price  is  an  arbitrary  price  fixed  by  the  manager 
of  the  clearing  house.  Each  day  at  the  close  of  business  the 
manager  of  the  clearing  house  sends  out  through  the  ticker  the 
settling  prices  for  the  various  stocks  for  the  use  of  brokers  in 
making  up  their  clearing  house  sheets.  In  their  use  in  mak- 
ing up  the  sheets  they  are  called  making-up  prices ;  in  their  use 
in  making  settlements  they  are  called  settling  prices.  These 
settling  prices  are  the  even  prices  next  nearest  to  the  last 
prices  of  the  day.  Thus,  if  the  last  price  of  a  stock  was  99  3-4 
or  loi  1-4  the  settling  price  would  be  100. 

The  broker  who  bought  200  shares  may  have  bought  them  at 
99  1-2  and  the  100  which  he  sold  may  have  been  sold  at  100  1-2. 
If  the  settling  price  was  100  he  would  put  down  the  extra  100 
shares  due  him  in  the  sold  column  at  100  the  same  as  if  he 
actually  had  sold  the  stock  at  100. 

Then  his  account  would  figure  out  thus :  Bought  200  at 
99  1-2,  which  equals  $19,900;  sold  100  at  100  1-2  and  100  at  100, 
which  equals  $20,050.  The  difiference  is  $150,  which  the  broker 
collects  by  draft  on  the  clearing  house.  Had  he  not  included 
the  100  shares  at  too  he  would  have  owed  $8,850.     To  the 


SMITH'S  FINANCIAL  DICTIONARY.  385 

broker  who  delivers  the  100  shares  to  him  at  100  he  gives  a 
check  for  $10,000. 

This  particular  part  of  the  operation  (the  delivery  of  the 
stock  and  collection  for  it)  is  wholly  outside  of  the  clearing 
house.  Deducting  from  this  $10,000  the  $150  received  in  the 
clearing  house  settlement  his  net  payment  is  $8,850,  exactly 
what  it  would  have  been  had  he  not  included  the  100  shares  at 
100  in  the  clearing  house  sheet. 

No  matter  if  a  broker  bought  more  stock  than  he  sold  or  sold 
more  than  he  bought  or  what  the  prices  may  be  or  how  many 
stocks  may  be  included  in  his  sheet  the  system  employed  in 
clearing  his  sheet  accomplishes  its  end.  Inasmuch  as  the  differ- 
ences both  in  cash  and  stocks  are  provided  for  in  the  clearing 
house  sheet  there  is,  when  the  general  settlement  is  concluded, 
no  balance  left  of  either  cash  or  stock.  There  was,  of  course, 
as  much  of  each  stock  sold  as  was  bought,  because  there  was  a 
seller  as  well  as  a  buyer  at  the  same  price  in  each  individual 
transaction,  and.  accordingly,  there  was  as  much  receivable  in 
the  aggregate  as  there  was  payable.  Both  sides  of  every  ac- 
count are  bound  to  balance  or  equalize  when  the  differences  in 
stock  and  money  are  figured  out  and  put  down  in  the  proper 
places. 

The  broker  who  is  short  of  stocks  in  his  sheet  (who  sold 
more  than  he  bought)  must  borrow  the  stocks  that  he  is  short 
of  for  the  deliveries  which  he  is  directed  by  the  manager  of  the 
clearing  house  to  make. 

Not  all  the  stocks  that  are  dealt  in  on  the  New  York  Stock 
Exchange  are  cleared  through  the  stock  exchange  clearing 
house.  Only  those  on  the  clearing  house  list  are  cleared.  The 
stocks  on  this  list  are  the  ones  actively  (largely)  dealt  in.  If 
an  inactive  stock  becomes  active  it  is  put  on  the  list;  if  an  ac- 
tive stock  becomes  inactive  it  is  taken  off  the  list. 

Transactions  in  stocks  not  on  the  clearing  house  list  are  not 
reported  to  the  clearing  house  at  all.  Settlements  in  these 
stocks  are  made  between  the  brokers  in  the  ordinary  course  of 
business.  For  another  thing,  only  stocks  bought  and  sold  regu- 
lar way  (in  the  regular  way)  and  at  3  are  cleared. 

Stocks  bought  and  sold  regular  way  are  put  on  the  clearing 
house  sheet  on  the  day  they  are  bought  and  sold,  but  are  de- 
liverable on  the  following  day.     Stocks  bought  and  sold  at  3 


386 SMITH'S  FINANCIAL  DICTIONARY. 

are  not  deliverable  until  the  third  day  after  they  are  sold  and 
are  not  put  on  the  clearing  house  sheet  until  the  second  day 
after  they  are  bought  or  sold ;  they  are  put  on  the  clearing 
house  sheet  at  the  settling  price  on  the  second  day. 

Stocks  bought  and  sold  for  cash  or  on  option  are  not 
cleared.  Also,  only  stocks  in  lots  of  lOO  shares  or  multiples  of 
IOC'  are  cleared  ;  fractional  lots  (lots  of  less  than  lOO  shares)  are 
excluded. 

In  settling  differences  on  contracts  in  grain,  cotton,  coffee, 
etc.,  a  similar  plan  is  pursued. 

NF.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  non-fundable,  as  non-fundable  bonds. 

N.  G.  These  letters  are  sometimes  used  as  an  abbreviation 
for  no  good  or  not  good. 

Ninety,  A  bill  of  exchange  payable  in  90  days  is  often  called 
a  ninety  ;  plural,  nineties. 

No  account.  \Mien  a  check  is  received  by  the  bank  upon 
which  it  is  drawn  and  the  drawer  (issuer)  has  no  account  with 
the  bank  the  words  "No  account"  are  stamped  or  written  on 
it  and  it  is  rejected. 

No  funds.  When  a  check  is  received  by  the  bank  upon 
which  it  is  drawn  and  the  drawer  (issuer)  has  no  funds  to  his 
credit  with  which  to  pay  it  the  words  "No  funds"  are  stamped 
or  written  on  it  and  it  is  rejected. 

Nominal.  Existing  in  name  only.  A  nominal  price  is  one 
named  for  convenience.  It  is  an  assumed  price — a  price  as- 
sumed in  the  absence  of  an  established  or  actual  price. 

Nominal  assets.  This  term  includes  all  assets,  but  it  refers 
particularly  to  those  assets  that  are  of  doubtful  or  no  value. 

Nominal  damages.  Damages  adjudged  in  a  trivial  amount 
where  a  right  has  been  invaded  but  no  actual  damage  sus- 
tained. 

Nominal  partner.  A  person  who  is  held  out  as  a  partner 
but  as  a  fact  has  no  interest  in  the  business. 

Nominal  value.  A  value  in  name  only ;  approximate  value ; 
estimated  value. 

Non-assented  stock  or  bonds.  Stock  or  bonds  which  the 
owners  refuse  to  deposit  under  an  agreement  by  which  their 
status  will  be  changed.  For  additional  information  see  Read- 
justment. 


SMITH'S  FINANCIAL  DICTIONARY. ^ 

Non-assessable  stock.     A  stock  that  cannot  be  assessed. 

Non-clearing  house  stocks.  Stocks  dealt  in  on  the  New  York 
Stock  Exchange  which  are  not  included  in  the  list  of  stocks 
cleared  at  the  stock  exchange  clearing  house. 

Non-cumulative  stock.  Stock  on  which  dividends  if  not 
paid  do  not  accumulate — that  is,  if  dividends  are  not  paid  for  a 
period  they  have  not  subsequently  to  be  paid  for  the  period 
when  they  were  not  declared. 

Non-interest-bearing.  Bearing  or  paying  no  interest.  The 
money  issued  by  the  United  States  government,  since  the  gov- 
ernment pays  no  interest  on  it,  is  a  non-interest-bearing  obliga- 
tion ;  the  bonds  issued  by  the  United  States  government,  since 
the  government  pays  interest  on  them,  are  interest-bearing 
obligations. 

Non-member  bank.  A  bank  that  is  not  a  member  of  a  clear- 
ing house   but  clears  through  a  bank  that  is  a  member. 

Non-member  bank  statement.     See  Bank  statement. 

Non-negotiable  instrument.  A  non-negotiable  instrument  is 
one  where  the  payee  has  the  right  to  set  off  or  present  in  par- 
tial or  entire  liquidation  of  it  a  claim  against  the  original  owner 
of  it  or  where  there  is  a  stipulation  that  payment  of  it  shall 
or  may  be  made  in  a  representative  of  money  (as  a  bill  of  ex- 
change or  draft  or  a  check)  or  that  payment  shall  or  may  be 
made  in  property. 

Also  see  Negotiable  instrument. 

Non- value  bill  (of  exchange).  Same  as  accommodation  bill 
(of  exchange)  ;  a  draft  (bill  of  exchange)  drawn  against  credit 
allowed  to  the  drawer  by  the  drawee  (the  one  who  pays  the 
draft). 

Also  see  Value  bill  (  of  exchange). 

No  protest.  A  draft  or  a  promissory  note  so  marked  is  not 
to  be  protested,  or  in  other  words,  is  not  to  go  to  protest  if 
not  paid ;  a  draft  or  a  promissory  note  so  marked  is  not  sub- 
ject to  the  protest  fee  charged  by  the  bank  or  other  agent 
entrusted  with  its  collection.  An  indorsed  draft  or  promissory 
note  is  sometimes  marked  "No  protest"  so  that  demand  shall 
not  be  made  upon  the  indorser  for  the  payment  of  it. 

When  a  draft  or  a  promissory  note  is  received  marked  "No 
protest"  and  the  instructions  are  to  protest  it  if  not  paid  the 
draft  should  be  protested  on  the  theory  that  to  make  a  pro- 


388  SMITH'S  FINANCIAL  DICTIONARY. 

test  when  not  necessary  is  a  less  serious  mistake  than  to  omit 
a  protest  when  one  is  necessary. 

For  additional  information  see  Protest. 

Northwestern  receipts.  Receipts  of  wheat  at  Duluth  and 
Minneapolis,  the  great  market  points  for  spring  wheat  raised  in 
Minnesota,  North  Dakota    and  South  Dakota. 

Not  a  delivery.  Stocks  or  bonds  are  not  a  delivery  (are  not 
deliverable)  in  fulfilment  of  contracts  entered  into  on  the  New 
York  Stock  Exchange  when  they  do  not  meet  all  requirements 
of  the  exchange.    See  Rules  for  delivery. 

The  rules  of  the  New  York  Stock  Exchange  are  generally 
observed  in  transactions  in  stocks  and  bonds  that  take  place 
elsewhere  than  on  the  exchange. 

The  term  not  a  delivery  is  also  used  in  dealings  in  grain, 
cotton,  coiifee,  etc. 

Also  see  Delivery,  A. 

Not  a  good  delivery.  This  term  is  colloquially  in  common 
use,  but  the  word  good  has  been  dropped  from  the  New  York 
Stock  Exchange  rules  for  delivery  as  superfluous.  A  thing,  as 
a  stock  or  a  bond,  either  is  not  a  delivery  (is  not  deliverable) 
on  a  contract  or  is  a  delivery  (is  deliverable).  For  information 
see  Not  a  delivery. 

Notary  or  notary  public.  An  officer  duly  commissioned  and 
holding  a  seal  of  office  who  is  empowered  by  law  to  note  pro- 
tests and  certify  the  same ;  to  take  depositions,  acknowledg- 
ment of  deeds  and  other  instruments  and  authenticate  the  same 
by  his  official  certificate,  signature  and  seal. 

The  protest  of  a  bill  of  exchange  (draft)  or  of  a  promissory 
note  under  a  notary's  signature  and  seal  is  everywhere  re- 
ceived as  legally  authenticated  without  other  evidence  of  the 
notary's  official  character. 

Formerly  this  officer  was  called  scrivener  or  one  who  at- 
tested declarations  and  made  drafts  of  deeds,  wills,  etc. 

Note.  The  abbreviated  name  for  a  promissory  note,  for  in- 
formation as  to  which  see  Promissory  note. 

Note  also  is  an  abbreviation  occasionally  used  for  bank 
note,  as  a  ten-dollar  note  or  a  five-pound  note. 

To  note  a  bill  of  exchange  (or  a  promissory  note)  means  to 
make  a  memorandum  on  it  to  the  effect  that  it  has  been  dis- 
honored ;  for  additional  information  see  Noting  a  bill. 


SMITH'S  FINANCIAL  DICTIONARY.  389 

Note  broker.  One  who  efifects  the  sale  of  promissory  notes. 
A  note  broker  is  different  from  a  money  broker.  The  commis- 
sion of  a  note  broker  is  generally  1-8  or  1-4  of  i  per  cent  of  the 
amount  of  the  note.  This  commission  is  paid  by  the  one  for 
whom  the  broker  sells  the  paper.  The  buyer  pays  no  com- 
mission. 

Note  of  hand.  Same  as  promissory  note;  see  Promissory 
note. 

Note  teller.  The  note  teller  in  a  bank  is  sometimes  called 
third  teller;  his  particular  business  is  to  attend  to  the  collection 
of  promissory  notes  and  drafts. 

Notice  of  dishonor.  Notice  by  the  holder  of  negotiable  paper 
to  the  drawer  or  indorser  that  it  was  not  paid  at  maturity. 

Noting  a  bill.  When  a  bill  (draft  or  promissory  note)  has 
been  presented  for  acceptance  or  payment  and  has  been  dis- 
honored a  note  to  that  effect  is  indorsed  on  the  bill,  after  which 
it  may  be  formally  protested. 

When  a  bill  has  been  noted  the  protest  may  (in  New  York 
state)  be  extended  as  of  (back  to)  the  day  of  noting. 

The  protest  should  be  commenced  on  the  day  on  which  ac- 
ceptance or  pa3'-ment  is  refused,  but  it  may  be  drawn  up  and 
completed  at  an}^  time  before  the  commencement  of  suit  or 
even  before  or  during  trial  and  be  antedated  accordingly. 

Not  worth  a  Continental.  This  phrase  had  its  origin  in  the 
great  depreciation  in  Continental  money  in  the  closing  years 
of  the  eighteenth  century. 

NS.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  new  series,  as  bonds  of  a  new  series. 

Nude  contract.     A  contract  without  a  consideration. 


390  SMITH'S  FINANCIAL  DICTIONARY. 


o 


O.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  offered.  An  offer  alone  (without  a  bid)  is  preceded  by 
an  O  and  a  dot,  thus :  RG.  O.  75,  meaning  that  Reading  stock 
was  offered  at  75.  A  sale  and  an  offer  is  printed  thus :  RG.  75, 
O.  75,  meaning  that  Reading  stock  was  sold  at  75  and  was 
afterward  oft'ered  at  75  without  a  sale  or  bid.  A  bid  and  an 
oft'er  are  separated  by  @,  thus:  75@i-2,  meaning  that  75  was 
bid  for  the  stock  and  that  it  was  offered  at  75  1-2.  (On  some 
tickers  three  dots  .  .  .  are  used  in  place  of  @). 

OB.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  opening  of  books  (see  Books  open)  ;  they  mean  that 
the  stock  so  sold  is  to  be  delivered  on  the  opening  of  the  trans- 
fer books  of  the  company  which  issued  it.  The  delay  in  de- 
livery until  that  time  is  because  the  stock  had  been  assigned 
to  a  specified  individual  by  the  original  owner  instead  of  hav- 
ing been  assigned  (or  signed)  in  blank  (see  Assigned  in 
blank)  and,  therefore,  not  being  a  delivery  it  was  necessary  to 
wait  until  a  new  certificate  could  be  obtained  before  making 
delivery  to  the  buyer. 

Also  see  At  the  opening. 

Obligation.     Debt. 

Obligations.  London  Stock  Exchange  name  for  a  certain 
class  of  bonds,  principally  of  governments  and  railroads  on  Ihe 
Continent  of  Europe. 

Obligatory  bond.  Any  bond  the  interest  on  which  is  at  a 
fixed  rate  payable  at  stated  intervals.  Failure  to  pay  the  in- 
terest on  such  a  bond  constitutes  a  default. 

Obligee.  The  person  in  whose  favor  a  bond  or  other  ob- 
ligation lias  been  entered  into. 

Obligor.  The  person  who  is  bound,  especially  by  bond,  to 
perform  an  obligation. 

Obvious  fraud.  When  a  member  of  an  exchange  is  expelled 
for  fraud  it  is  usually  stated  that  he  is  expelled  for  obvious 
fraud,  bv  which  is  meant  that  his  guilt  was  clearly  established. 


SMITH'S  FINANCIAL  DICTIONARY. 29^ 

Ocean  room.  Same  as  sea  room  ;  freight  accommodation  on 
an  ocean  vessel. 

Odd  lot.  Same  as  fractional  lot ;  in  stocks  less  than  lOO 
shares  and  in  bonds  less  than  $10,000. 

Off  coast.  Said  of  a  vessel  arrived  at  port  but  waiting  or- 
ders to  discharge  cargo  or  go  to  another  port. 

Offor.  The  expression  of  a  desire  to  buy  or  sell  at  a  price 
named  by  the  offerer.  For  additional  information  see  Bid  and 
asked. 

Offered  down.  Said  when  a  stock  is  offered  for  sale  at  a 
price  lower  than  the  actual  market  price. 

Official  broker.  The  one  who  is  designated  by  the  commit- 
tee for  general  purposes  of  the  London  Stock  Exchange  to 
make  purchases  and  sales  in  settlement  of  disputed  transac- 
tions and  in  defaults. 

Official  list.     See  Stock  Exchange  Daily  Official  List. 

Officially  quoted.  Quoted  in  the  official  price  list  of  the 
London  Stock  Exchange. 

Official  minimum.  A  term  applied  to  the  minimum  dis- 
count rate  of  the  Bank  of  England. 

Official  time  of  the  New  York  Stock  Exchange.  At  14 
minutes  after  2  p.  m.  on  each  business  day  except  Saturday 
the  words  Hammond's  time  are  printed  on  the  tape  by  the 
stock  ticker  and  afterwards  the  lever  of  the  instrument  sounds 
fifteen  beats.  When  the  fifteenth  beat  is  sounded  it  is  2.15 
p.  m.,  and  the  end  of  the  time  for  the  delivery  of  securities  in 
settlement  of  contracts  entered  into  on  the  New  York  Stock 
Exchange  which  mature  on  the  current  day. 

0.'K.  These  letters  when  inscribed  on  a  document  signify 
that  it  is  correct. 

Old  demand  notes.  In  the  monthly  statement  of  the  public 
debt  appears  the  item  "Old  demand  notes."  It  refers  to  notes 
(money  in  the  form  of  promissory  notes)  issued  previous  to 
the  present  United  States  notes  (greenbacks). 

Old  Lady  of  Threadneedle  Street.  A  colloquial  appellation 
for  the  Bank  of  England,  the  main  entrance  to  which  is  on 
Threadneedle  street  (London). 

Omnium.  A  name,  now  obsolete,  for  certain  British  govern- 
ment loans  issued  towards  the  end  of  the  eighteenth  century; 
they  were  called  omnium  because  each  subscriber  for   £100 


39^  SMITH'S  FINANCIAL  DICTIONARY. 

stock  received  a  parcel  composed  of  several  sorts  of  govern- 
ment loans. 

On  account.  A  payment  on  account  is  a  payment  in  par- 
tial liquidation  of  an  obligation  or  debt. 

On  a  scale.  A  term  used  in  speculative  operations  in  stocks, 
meaning-  buying  or  selling,  as  the  case  may  be,  at  stated  inter- 
vals in  prices  as  prices  decline  or  advance.  For  instance, 
buying  at  lOO,  98,  96,  94  and  92  would  be  buying  on  a  2  per 
cent  declining  scale.  Reversing  the  order  of  prices  would  be 
buying  on  an  ascending  scale.  The  operation  of  selling  on  a 
scale  is  conducted  in  the  same  fashion. 

Also  see  Pyramiding. 

On  balance.  Buying  on  balance  is  the  buying  in  excess  of 
previous  sales.  For  instance,  if  an  operator  who  has  sold 
5,000  shares  of  stock  turns  about  and  buys  10,000  shares  5,000 
shares  of  the  stock  bought  are  bought  on  balance.  Selling  on 
balance  is  the  selling  in  excess  of  previous  purchases. 

On  call.  Deliverable  on  demand.  For  information  as  to 
money  borrowed  or  loaned  on  call  see  Call  loan. 

On  canal.  Said  of  grain  in  transit  on  the  Erie  canal ;  such 
grain  is  included  in  the  visible  supply. 

On  'change.      On  a  stock  exchange  or  on  any  exchange. 

On  consignment.  Said  of  goods  which  are  sent  by  one 
party  (who  is  the  consignor)  to  another  party  (who  is  the 
consignee)  to  be  sold  by  the  latter  for  the  benefit  of  the  for- 
mer. Property  forwarded  on  consignment  is  paid  for  as  sales 
of  it  are  effected. 

One-name  paper.  Single-name  paper ;  paper  without  in- 
dorsement. This  term'  is  seldom  used ;  the  term  almost  in- 
variably used  is  single-name  paper. 

On  lake.  This  term  is  applied  to  grain  in  transit  on  the 
lakes ;  such  grain  is  included  in  the  visible  supply. 

On  margin.  When  stocks  are  bought  or  are  sold  short  on 
margin  a  percentage  of  the  par  (face)  value,  say  10  per  cent, 
is  deposited  with  the  broker  to  secure  him  against  possible 
loss.     The  amount  deposited  is  margin. 

For  information  as  to  margin  for  speculative  operations  in 
stocks,  bonds,  grain,  lard,  pork,  short  ribs,  cotton,  cofTee  and 
silver  bullion  see  Margin. 

On  memorandum.     In  trade  when  an  order  is  booked   (re- 


SMITH'S  FINANCIAL  DICTIONARY.  393 

ceived  and  recorded)  on  memorandum  it  is  meant  that  it  is 
booked  at  a  private  price,  as  distinguished  from  an  open  or 
public  price.  For  example,  an  open  price  may  not  yet  have 
been  made  on  goods  to  be  brought  out  in  the  future,  but  an 
order  for  the  goods  may  be  accepted  on  memorandum — at  a 
private  price  agreed  upon  between  the  seller  and  the  buyer. 

On  open  account.     For  information  see  Open  account. 

On  order.     Subject  to  order. 

Property  (as  grain)  shipped,  but  with  no  consignee  (re- 
ceiver) named,  the  property  being  deliverable  on  the  order  of 
the  consignor  (shipper)  ;  as  a  fact  the  f)roperty  is  deliverable 
to  the  holder  of  the  bill  of  lading  (the  receipt  for  the  property 
issued  by  the  railroad  or  other  transportation  company). 

Shipments  on  order  figure  to  a  considerable  extent  in  deal- 
ings in  both  domestic  and  foreign  exchange.  Illustration : 
A  shipment  of  grain  from  Chicago  to  New  York  may  be  con- 
signed on  order.  A  certain  amount  is  advanced  by  a  bank 
(or  banker)  on  the  bill  of  lading.  When  the  grain  is  sold 
in  New  York  the  bank  surrenders  the  bill  of  lading  to  the 
buyer  of  the  grain,  reimburses  itself  for  its  advance  to  the 
shipper    and  returns  the  balance  to  the  shipper. 

Or,  a  shipment  of  grain  may  be  made  from  New  York  to 
London.  The  process  is  the  same  as  with  the  shipment  of 
grain  from  Chicago  to  New  York. 

Also  see  Sold  on  order ;  also  see  To  order. 

On  passage.  Grain  or  other  commodities  or  merchandise 
on  the  high  seas ;  refers  particularly  to  grain. 

On  the  inside.  Possessing  a  knowledge  of  afifairs  that  are 
secret  or  that  are  known  to  very  few. 

On  track.  A  term  applied  to  grain  in  cars ;  such  grain  is 
not  included  in  the  visible  supply  for  the  reason  that  its  loca- 
tion is  not  always  known. 

Open  account.  Same  as  running  account,  although  the 
term  open  account  is  usually  employed. 

In  trade  (particularly  the  wholesale  trade)  when  an  open 
account  is  established  the  buyer  arranges  with  the  seller  to 
receive  credit  for  a  certain  period  on  purchases  made.  He 
does  not  give  a  promissory  note  or  furnish  security  of  any 
kind,  but  when  the  period  of  credit  agreed  upon  has  elapsed 
after  a  (after  each)  purchase  he  makes  payment  for  it  by  check 


394  SMITH'S  FINANCIAL  DICTIONARY. 

or  bill  of  exchange  or  in  whatever  way  may  have  been  pre- 
determined by  the  seller  and  buyer.  If  the  period  of  credit  is 
exceeded  without  payment  by  the  buyer  the  seller  is  consid- 
ered to  have  or  perhaps  by  stipulation  has  the  right  to  draw 
on  the  buyer  for  the  amount  due. 

The  name  open  account  also  is  applied  to  an  account  in 
which  some  item  is  not  settled  between  the  parties. 

On  the  London  Stock  Exchange  the  term  open  account 
means  the  excess  at  the  fortnightly  settlement  of  the  bull 
(long)  interest  over  the  bear  (short)  interest;  or  the  reverse, 

m 

the  excess  of  the  bear  interest  over  the  bull  interest  in  the  mar- 
ket as  a  whole  or  in  a  group  of  stocks  or  in  a  single  stock,  ac- 
cordingly as  specified.  It  is  an  open  bull  account  or  an  open 
bear  account  as  designated. 

Open  credit.  A  credit  given  to  a  customer  at  a  bank  against 
which  he  may  draw  without  pledging  security ;  or  in  trade  a 
credit  given  to  a  customer  against  which  he  may  order  goods. 

Open  market.  The  public  market ;  a  market  that  is  free  to 
all,  as  distinguished  from  one  participation  in  which  is  re- 
stricted to  members  of  an  exchange. 

Open  market  discount.  This  term  is  generally  applied  to 
the  open  market  discount  rate  in  a  foreign  financial  centre.  In 
London  the  bank  rate  is  the  rate  of  the  Bank  of  England, 
whereas  the  open  market  rate  is  the  rate  of  other  banks  and 
bankers  and  bill  brokers  (dealers  in  commercial  and  bank 
paper).  In  Paris  the  bank  rate  is  the  rate  of  the  Bank  of 
France,  in  Berlin  the  bank  rate  is  the  rate  of  the  Imperial 
Bank  of  Germany,  and  so  on. 

In  New  York  the  bank  rate  is  the  uniform  rate  of  the  banks 
as  distinguished  from  the  varying  rates  of  other  lenders.  In 
London  when  the  Bank  of  England  makes  a  rate  the  other 
lenders  adopt  it,  if  possible,  or  sometimes  even  quote  a  higher 
one ;  but  if  they  find  they  cannot  do  business  at  it  they  make 
a  lower  rate,  and  so  it  is  in  Paris,  Berlin,  etc.  In  New  York 
if  other  lenders  cannot  do  business  at  the  rate  adopted  by  the 
banks  they  make  a  lower  one. 

Open  market  rate.  As  applied  to  money  the  open  market 
rate  is  the  rate  other  than  the  "bank  rate."  See  Open  market 
discount. 

Open  order.     One  good  until  canceled  or  countermanded. 


SMITH'S  FINANCIAL  DICTIONARY.  395 


Open  position.  London  Stock  Exchange  term  for  the 
amount  of  stock  that  has  been  bought  for  the  rise  or  sold  for 
the  fall  by  speculators.  For  instance,  if  it  is  said  that  there  is 
a  large  bull  position  open  in  consols  or  in  the  consol  market 
it  is  meant  that  speculators  have  bought'  consols  heavily  in  ex- 
pectation of  a  rise  in  their  price.  An  open  position  is  closed 
when  the  bull  resells  or  the  bear  repurchases,  thus  liquidat- 
ing his  commitments. 

Open  price.  A  trade  term ;  a  public  price  as  distinguished 
from  a  private  price. 

Open  trade.  This  term  applies  to  a  speculative  trade  or 
transaction  that  has  not  been  closed.  For  instance,  when  a 
stock  has  been  bought  that  is  to  be  sold  again  it  is  an  open 
trade  or  the  trade  is  open  until  the  stock  actually  is  sold  and 
the  trade  or  transaction  is  thus  completed  or  closed.  It  is  the 
same  if  a  stock  is  sold  short ;  it  is  an  open  trade  until  the  stock 
is  bought.  The  term  also  applies  to  trades  in  grain,  cotton, 
coffee,  etc. 

Operating  company.  In  the  case  of  a  railroad  this  is  the 
company  which  owrxs  and  actually  operates  the  road,  but 
which  company  itself  is  owned,  or  at  least  the  control  of  which 
is  owned,  by  another  company ;  the  latter  company  would  be 
designated  as  a  controlling  company. 

Operating  expenses.  The  expenses  involved  in  the  opera- 
tion of  a  company. 

Operator.  In  stocks  a  professional  dealer;  one  who  makes 
a  business  of  speculation ;  the  term  is  generally  construed  as 
meaning  a  speculator  on  a  large  scale. 

O.  p.  money.  A  Wall  Street  colloquialism,  meaning  other 
people's  money.  The  term  is  sometimes  applied  to  money 
that  has  been  borrowed  or  to  money  offering  in  the  money 
market — that  is,  money  which  may  be  borrowed. 

Option.  Property  bought  or  sold  to  be  received  or  delivered 
by  the  buyer  or  seller  in  accordance  with  the  terms  agreed 
upon.  Sometimes  the  buyer  pays  for  the  privilege  of  calling 
for  the  delivery  of  the  property  within  a  certain  time  if  he  so 
wills,  but  he  is  not  obliged  to  take  it;  sometimes  the  seller 
pays  for  the  privilege  of  delivering  the  property. 

In  speculation  an  option  is  the  purchased  privilege  of  either 
receiving  or  delivering  a  specified   amount  of  anything   (as 


396  SMITH'S  FINANCIAL  DICTIONARY. 

stocks,  grain,  cotton,  coffee,  etc.)  at  a  specified  price  within  a 
specified  time. 

In  stocks  bought  on  buyer's  option  the  buyer  may,  when  the 
option  is  for  four  days  or  more,  demand  deHvery  of  the  stock 
on  any  day  within  the  time  specified  on  one  day's  notice  to  the 
seller.  In  stocks  sold  on  seller's  option,  when  the  option  is 
for  four  days  or  more,  the  seller  may  deliver  the  stock  to  the 
buyer  on  any  day  within  the  time  specified  on  one  day's  notice 
to  the  buyer. 

When  a  dividend  becomes  due  on  a  stock  during  the 
pendency  of  an  option  on  it  the  dividend  is  collected  by  the 
seller  of  the  stock,  who  holds  it,  allows  interest  on  it  and  pays 
the  dividend,  with  the  interest  on  it,  to  the  buyer  on  the  settle- 
ment of  the  contract.  When  an  option  on  a  stock  matures 
during  the  closing  of  transfer  books  the  seller  of  the  stock 
gives  to  the  buyer  of  the  stock  a  due  bill  for  the  amount  of  the 
dividend  which  is  payable  when  the  dividend  is  paid,  but  the 
due  bill  does  not  bear  interest. 

Also  see  Privilege. 

Optional  bond.  A  bond  maturing  (expiring)  at  a  specified 
date,  but  which  may  be  redeemed  (paid  and  canceled)  after 
a  designated  earlier  date  at  the  pleasure  (option)  of  the  com- 
pany (or  government)  issuing  it.  Thus,  a  bond  maturing  in 
fifty  years,  but  which  may  be  redeemed  after  ten  years,  is  an 
optional  bond. 

Option  money.  The  amount  paid  to  obtain  an  option ;  see 
Option. 

Order.  A  written  instrument  drawn  by  one  person  and 
addressed  to  another  which  directs  the  payment  of  money,  the 
rendering  of  a  service  or  the  delivery  of  something  to  the 
bearer  of  the  writing. 

The  commonest  forms  of  orders  for  the  payment  of  money 
are  checks  and  drafts  (bills  of  exchange).  Postoffice  money 
orders  and  the  money  orders  issued  by  express  companies  are 
drafts. 

When  a  speculator  directs  a  broker  to  make  a  purchase  or 
sale  he  is  said  to  have  given  an  order  and  when  the  broker 
has  made  the  purchase  or  sale  he  is  said  to  have  executed  the 
order. 

Names   of  orders    employed    in    speculative   operations   are 


SMITH'S  FINANCIAL  DICTIONARY.  397 

buying  order  (an  order  directing  a  purchase),  selling  order 
(ai.  order  directing  a  sale),  stop  order  (an  order  fixing  a  point 
or  price  at  which  a  sale  or  purchase  is  to  be  made,  usually  to 
avoid  loss,  and  when  given  for  this  purpose  it  is  called  a  stop- 
loss  order)  and  cancel  order  (an  order  canceling  a  previous 
order). 

Also  see  On  order;  also  see  To  order. 

Ordinary  general  meeting.  English  term  for  a  meeting  of 
tlu:  shareholders  (stockholders)  of  a  company  at  which  the 
directors  propose  a  dividend,  which  cannot  be  paid  without 
the  approval  of  the  shareholders ;  also  at  this  meeting  the 
directors  present  for  adoption  their  report  and  accounts,  which 
must  have  been  issued  to  shareholders  beforehand ;  also  at  this 
meeting  the  places  of  directors,  who  retire  by  rotation  are 
filled,  and  the  auditors,  who  retire  as  a  matter  of  course,  are 
reelected  or  replaced. 

Ordinary  stock.     Common  or  general  stock  . 

In  Great  Britain  when  an  ordinary  (common)  stock  has 
been  divided  into  two  parts  one  part,  called  deferred,  receives 
no  dividend  until  the  other  part,  called  preferred,  has  received 
a  dividend  at  a  fixed  rate.  The  deferred  stock  is  called  A 
stock  and  the  preferred  stock  is  called  B  stock. 

This  B  or  preferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called  pre- 
ferred stock  is  in  Great  Britain  called  preference  stock  and 
preference  stock  in  Great  Britain  may  be  divided  into  two 
or  more  classes  called  first  preference,  second  preference,  etc., 
just  as  preferred  stock  in  the  United  States  may  be  divided 
into  two  or  more  classes  called  first  preferred,  second  pre- 
ferred, etc.  When,  however,  there  is  but  one  class  of  pref- 
erence stock  ahead  of  an  ordinary  stock  in  Great  Britain  the 
B  or  preferred  stock  is  equivalent  to  second  preferred  stock 
in  tlie  United  States. 

O.  T.  On  track ;  a  term  applied  to  grain  in  cars ;  such 
grain  is  not  included  in  the  visible  supply  for  the  reason  that 
its  location  is  not  always  known. 

Other  people's  money.  The  term  is  usually  abbreviated  to 
O.  p.  money  ;  it  is  a  term  sometimes  applied  to  money  that 
has  been  borrowed  or  to  money  offering  in  the  market — that 
is,  money  which  may  be  borrowed. 


398  SMITH'S  FINANCIAL  DICTIONARY. 

Outclearer.  The  name  given  to  the  clerk  in  a  bank  in  Great 
Britain  who  arranges,  makes  a  record  of  and  takes  to  the 
clearing  house  items  (checks,  drafts,  etc.)  for  collection  from 
other  banks.  The  corresponding  clerk  in  a  bank  in  New  York 
is  called  settling  clerk. 

Also  see  Inclearer. 

Outcrop.  A  name  applied  to  a  mine  that  is  worked  near  the 
surface.  A  mine  whose  workings  or  levels  are  deep  down  in 
the  earth  is  known  as  a  deep  level. 

Outlawed.  An  outlawed  account  or  claim  is  one  upon 
which  suit  is  barred  by  the  statute  of  limitations ;  it  is  an  ac- 
count or  claim  which  the  creditor  has  so  long  delayed  in  en- 
forcing that  the  courts,  acting  under  the  statute,  decline  to 
assist  him  in  collecting  it.  In  an  ordinary  contract,  obligation 
or  liability  in  New  York  state  suit  must  be  brought  within  six 
years  from  the  last  payment  upon  it  of  principal  or  interest 
or  within  six  years  from  the  last  date  upon  which  the  debtor 
acknowledged  his  liability. 

Out  of  condition.  When  grain  is  injured  so  that  its  grade  is 
lowered  it  is  out  of  condition. 

Out-of-town  check.  A  check  on  a  bank  which  is  located 
outside  the  territory  of  the  clearing  house  with  which  the 
collecting  bank  is  identified.  In  this  case  the  payment  of  the 
check  is  accomplished  by  special  collection. 

Outside  bank.  One  that  is  not  a  member  of  a  clearing  house 
and  does  not  clear  through  a  bank  that  is  a  member.  Also  see 
Non-member  bank. 

Outside  broker.  A  broker  who  is  not  a  member  of  an  ex- 
change ;  one  who  deals  in  securities  that  are  not  dealt  in  on 
a  stock  exchange.  A  dealer  in  the  outside  market  or  on  the 
curb  is  an  outside  broker.  In  New  York  such  a  broker  is  not 
a  bucket  shop  keeper;  see  Bucket  shop. 

In  London  an  outside  broker  is  one  who  is  not  a  member 
of  the  London  Stock  Exchange  and  is  sometimes  described 
as  a  bucket  shop  keeper.  Some  outside  brokers,  however,  con- 
duct a  perfectly  legitimate  business. 

Outside  market.  The  name  that  is  applied  in  New  York  to 
the  market  for  securities  not  dealt  in  on  the  New  York  Stock 
Exchange.  The  curb  market  or  street  market  is  called  the 
outside  market,  but  securities  dealt  in  in  offices  or  anywhere 


SMITH'S  FINANCIAL  DICTIONARY. 399 

else  outside  the  New  York  Stock  Exchange  are  classed  as 
in  the  outside  market. 

Outside  securities  as  a  rule  cannot  be  bought  on  margin. 
Tliey  have  to  be  paid  for  outright.  This  is  because  of  the 
difficulty  which  might  be  entailed  in  enforcing  contracts  in 
these  securities ;  contracts  in  securities  dealt  in  on  the  New 
York  Stock  Exchange  are  easily  enforced  under  the  rules  of 
the  exchange.  The  brokers  in  outside  securities  have  no  for- 
mal organization  or  rules,  although  in  practise  they  follow  the 
rules  of  the  New  York  Stock  Exchange. 

Outside  securities  are  not  sold  short  to  any  extent  owing  to 
the  uncertainty  as  to  the  ability  to  borrow  them.  In  other 
words,  the  dealings  are  chiefly  in  the  actual  securities  in  sell- 
ing as  well  as  in  buying. 

The  term  outside  market  as  applied  to  money  in  London 
means  the  money  market  aside  from  the  Bank  of  England;  it 
means  the  same  as  open  market;  see  Open  market  discount. 

Outsiders.  In  Wall  Street  this  term  means  others  than 
professional  or  regular  speculators;  the  general  public. 

Outside  securities.  Those  not  dealt  in  on  the  New  York 
Stock  Exchange.  Though  the  securities  may  not  be  dealt  in 
at  the  place  of  assembly  of  the  outside  brokers  but  only  in 
offices  they  still  are  outside  securities.  For  additional  infor- 
mation see  Outside  market. 

Outward  trade.  Another  name  for  export  trade ;  goods  and 
other  articles  of  commerce  sold  and  shipped  to  other  countries. 

Over.  In  London  over  a  figure  or  fraction  means  1-32 
above.     Over  3-16  means  7-32. 

Overbought.  Said  when  the  long  interest  in  the  stock 
market  is  unwieldy.  When  an  individual  has  bought  more 
than  he  can  provide  margin  for  in  a  decline  he  has  overbought. 

Overcapitalized.  When  a  company  is  unable  to  earn  profits 
amounting  to  a  fair  return  on  its  capital  it  is  said  to  be  over- 
capitalized. 

Overcertification.  When  a  bank  certifies  a  check  (see 
Certified  check)  and  the  drawer  (issuer)  has  not  at  the  time 
enough  funds  on  hand  to  meet  it  that  is  overcertification. 
The  bank  expects  the  drawer  to  make  up  the  deficiency  by  a 
deposit  before  the  check  is  presented  for  payment. 

Overcertification  is  common  and  frequently  is  necessary  in 


wo  SMITH'S  FINANCIAL  DICTIONARY. 

Wall  Street.  If  stock  for  a  large  amount  is  purchased  the 
buyer  may  not  have  on  deposit  sufficient  funds  with  which  to 
pay  for  it.  The  purchaser  issues  his  check,  which  is  certified 
1)}  the  bank  on  which  it  is  drawn.  Then  he  obtains  a  loan 
from  the  bank,  which  is  secured  by  pledging  the  stock  pur- 
chased. The  amount  of  the  loan  is  placed  to  the  credit  of  the 
owner  of  the  stock  and  thus  his  overdrawn  account  is  made 
good. 

Overcertification  is  prohibited  by  the  National  bank  act 
and  renders  officers  or  clerks  liable  to  a  fine  of  not  more  than 
$5,000  or  imprisonment  for  not  more  than  five  years  or  both ; 
it  also  gives  the  Comptroller  of  the  Currency  power  to  appoint 
a  receiver.  In  the  National  bank  act  overcertification  is  called 
false  certification. 

Overdraft.  When  a  check  is  drawn  on  a  bank  and  there 
are  not  sufficient  funds  to  the  credit  of  the  drawer  (issuer)  in 
the  bank  to  meet  it  the  check  is  an  overdraft — the  drawer  of 
the  check  has  overdrawn  his  account.  In  overcertification  the 
check  that  is  certified  is  technically  an  overdraft. 

Overend  Friday.  A  name  given  to  one  of  the  two  Black 
Fridays  in  the  financial  history  of  England;  the  day  (Friday, 
May  II,  1866)  on  which  occurred  a  panic  as  a  result  of  the 
failure  of  the  great  discount  house  of  Overend,  Gurney  &  Co. 
For  additional  information  see  Black  Friday. 

Overhead  price.  Same  as  all-'round  price ;  a  price  which 
covers  cost  and  all  charges,  including  what  usually  are  extra 
charges. 

Overissue.  When  more  stock  has  been  issued  than  the 
charter  of  the  company  authorizes ;  criminal. 

Overlying  bond.  A  bond  issued  under  a  mortgage  posterior 
and  subsequent  in  claim  to  another  mortgage. 

Overlying  mortgage.  A  mortgage  posterior  and  subsequent 
in  claim  to  another  mortgage ;  for  instance,  when  speaking  of 
a  first  mortgage  a  second  mortgage  is  an  overlying  mortgage. 

Over-night.  An  over-night  transaction  is  one  lasting  for 
or  to  be  concluded  in  24  hours — that  is,  lasting  until  or  to  be 
concluded  on  the  business  day  next  following  that  on  which 
thv-  transaction  was  entered  into. 

Over-night  loan.     A  loan  continuing  only  for  24  hours  or 


SMITH'S  FINANCIAL  DICTIONARY.  401 

until  the  business  day  next  following  that  on  which  it  is 
effected. 

Overplus.     Same  as  surplus ;  residue ;  remainder. 

Over-sea  trade.  Trade  with  a  country  which  is  beyond  an 
inter\-cnini:^  sea. 

Oversold.  Said  when  the  short  interest  in  the  stock  market 
is  excessive ;  also  said  when  an  individual  has  sold  more  than 
he  can  provide  margin  for  in  case  of  an  advance. 

Oversold  account.  London  Stock  Exchange  term ;  said 
when  bear  (short)  sales  of  securities  for  the  account  (see  Ac- 
count, The)  are  excessive. 

Overstayed.  When  a  speculator  has  failed  to  close  his 
transaction  until  part  of  his  profit  has  vanished  he  has  over- 
stayed— overstayed  his  market. 

Over  the  counter.  Said  of  business  done  in  an  office  instead 
of  at  an  exchange. 

In  transactions  in  (foreign)  exchange  the  over-the-counter 
or  counter  rate  is  the  rate  which  the  dealer  in  exchange  pays 
for  a  bill. 


Pacific  or  transcontinental  railroads.  Atchison,  Topeka  & 
Santa  Fe ;  Canadian  Pacific,  Great  Northern,  Northern  Pacific, 
Southern  Pacific,  and  Union  Pacific. 

Paid-up  stock.  That  which  the  subscribers  (persons  who 
have  subscribed  for  it)  have  paid  for  in  full. 

Panic.  In  Wall  Street  a  panic  is  a  time  of  great  alarm  when 
there  is  a  rush  to  sell  securities  with  a  ruthless  sacrifice  of 
values. 

Also  see  Black  Friday;  also  see  Grant  &  Ward  panic;  also 
see  Jay  Cooke  panic. 

Paper.  Usually  refers  to  commercial  paper.  Collectively, 
promissory  notes  and  bills  of  exchange  (drafts)  are  paper; 
specificially,  a  single  promissory  note  or  a  single  bill  of  ex- 
change is  a  piece  of  paper. 


40^  SMITH'S  FINANCIAL  DICTIONARY. 

Paper  basis.  Exists  when  values  are  based  on  paper  money. 
The  value  of  paper  money  depends  on  the  credit  of  the  gov- 
ernment issuing  it. 

Paper  money.  Paper  money,  as  a  rule,  is  intended  for  cir- 
culation solely  in  the  country  in  which  it  is  issued. 

In  countries  where  paper  money  is  not  backed  by  gold  or 
silver,  or  is  backed  only  by  silver,  or  by  only  a  small  per- 
centage of  gold,  paper  money  is  depreciated,  or  in  other 
words,  is  at  a  discount.  If  lOO  gold  dollars  cost  200  paper 
dollars  gold  money  is  at  a  premium  of  100  per  ce'nt  and  paper 
money  is  at  a  discount  of  50  per  cent ;  again,  if  100  silver 
dollars  cost  150  paper  dollars  silver  money  is  at  a  premium  of 
50  per  cent  and  paper  money  is  at  a  discount  of  33  1-3  per  cent. 

Paper  profits.  Profits  in  transactions  not  yet  closed  and 
consequently  not  yet  in  hand. 

Par.     The  face  value. 

On  the  New  York  Stock  Exchange  if  the  face  value  of  a 
stock  is  $100  it  is  at  par  when  it  is  selling  at  100.  It  is  above 
par  when  it  is  selling  at  a  higher  price,  as  loi  ;  it  is  below  par 
when  it  is  selling  at  a  lower  price,  as  99.  Half-stock  (stock 
of  the  face  value  of  $50)  also  is  at  par  when  it  is  quoted  at  lOO, 
which  in  this  case  means  $50.  The  face  value  of  a  stock  is 
divided  into  100  parts  for  quotation  purposes,  no  matter  what 
the  face  value  may  be,  and  each  part  is  called  i  per  cent  or  i 
point  (or  a  point).  Therefore,  when  a  half-stock  is  quoted  at 
loi  it  is  I  above  par,  which  means  that  the  stock  is  worth 
$50.50  a  share ;  when  it  is  quoted  at  99  it  is  i  below  par,  which 
means  that  the  stock  is  worth  $49.50  a  share.  The  same 
principle  applies  to  quarter-stock  (stock  of  the  face  value  of 
$25)  and,  in  brief,  to  stock  of  any  face  value. 

In  some  markets  stocks  are  quoted  in  dollars  instead  of  by 
percentage.  Thus,  in  such  markets  if  a  stock  of  the  face  value 
of  $100  is  selling  at  100  it  is  at  par;  if  selling  at  loi  it  is  i 
above  par;  if  selling  at  99  it  is  i  below  par.  Likewise,  if  a 
stock  of  the  face  value  of  $50  is  selling  at  50  it  is  at  par ;  if  sell- 
ing at  51  it  is  I  above  par;  if  selling  at  49  it  is  i  below  par. 
So,  also,  if  a  stock  of  the  face  value  of  $25  is  selling  at  25  it  is 
at  par ;  if  selling  at  26  it  is  i  above  par ;  if  selling  at  24  it  is 
I  below  par ;  and  so  on. 


SMITH'S  FINANCIAL  DICTIONARY.  403 

Parent  company.  One  from  which  other  companies  derive 
authority.  A  company  owning  a  patent  may  grant  to  other 
companies  the  right  to  use  the  patent.  The  parent  company 
generally  owns  a  controlling  interest  in  a  company  which  op- 
erates under  authority  from  it,  but  this  is  not  necessarily  the 
case. 

Paris  Bourse.  The  official  name  is  "The  Company  of  the 
Paris  Bank,  Exchange,  Trade,  and  Finance  Brokers".  The 
governing  body  of  the  bourse  is  the  chambre  syndicate.  A 
membership  in  the  bourse  can  only  be  secured  by  purchase 
(as  in  the  New  York  Stock  Exchange)  and  then  the  candidate 
for  membership  must  secure  the  approval  of  the  Minister  of 
Finance  before  he  can  present  his  name  for  election,  and  the 
election  is  by  vote  of  the  members  as  a  whole  and  not  by  a 
committee.  A  member  is  elected  for  life  as  in  the  New  York 
Stock  Exchange. 

A  membership  in  the  Paris  Bourse  may  be  owned  by 
twelve  persons,  but  it  must  be  in  the  name  and  control 
of  some  one  of  the  owners,  who  alone  has  the  right  to  do 
business  in  the  bourse  and  must  own  outright  at  least  one- 
fourth  of  the  membership. 

The  small  enclosure  in  the  Paris  Bourse  set  apart  for  the  use 
of  the  seventy  official  brokers  or  agents  de  change  is  desig- 
nated as  the  parquet ;  also  the  agents  themselves  as  a  body 
are  designated  as  the  parquet  to  distinguish  them  from  the 
coulisse  or  body  of  outside  brokers,  these  outside  brokers  as 
individuals  being  termed  coulissiers. 

Parity.  This  word  when  applied  to  the  price  of  a  stock 
means  a  price  which  is  equivalent  or  equal  to  the  price  for 
the  same  stock  when  it  is  quoted  on  a  different  basis.  The 
price  in  London  of  an  American  stock  is  at  parity  with  the 
price  in  New  York  when  the  stock  is  selling  in  London  at  a 
price  which,  allowing  for  the  difference  in  method  of  quoting, 
is  equivalent  or  equal  to  the  price  at  which  it  is  selling  in 
New  York. 

In  dealings  in  American  stocks  on  the  London  Stock  Ex- 
change 4  shillings  is  counted  as  $1.  Four  shillings  being 
equal  to  97  1-3  cents  the  price  of  an  American  stock  must  be 
2  2-3  per  cent  (quotably  2  5-8  per  cent)  higher  in  London 
than  in  New  York  if  the  London  price  is  to  be  equivalent  to 


404  SMITH'S  FINANCIAL  DICTIONARY. 

(or  at  a  parity  with)  the  New  York  price.  Not  2  5-8  per  cent  is 
to  be  added  arbitrarily  to  the  New  York  price,  but  2  5-8  per 
cent  of  the  New  York  price,  whatever  it  may  be,  is  to  be  add- 
ed to  the  New  York  price  to  make  an  equivalent  London  price. 

Thus,  for  a  stock  selling  at  50  in  New  York  the  equivalent 
price  in  London  would  be  51  3-8  (while  the  fraction  3-8  is  not 
strictly  correct  it  is  quotably  correct).  For  a  stock  selling 
at  100  in  New  York  the  equivalent  price  in  London  would  be 
102  5-8.  Conversely,  for  a  stock  selling  at  100  in  London  the 
equivalent  price  in  New  York  would  be  97  3-8  and  for  a  stock 
selling  at  50  in  London  the  equivalent  price  in  New  York 
would  be  48  5-8. 

In  grain  there  is  a  normal  difference  in  price  between  two 
markets  equal  to  the  cost  of  transporting  the  grain  from  the 
market  where  the  lower  price  prevails  to  the  market  where 
the  higher  price  prevails.  When  the  difference  is  normal 
prices  are  at  parity.     It  is  the  same  in  cotton,  etc. 

Par  of  exchange.  The  par  of  foreign  exchange  is  the  fixed  in- 
trinsic value  of  the  currency  unit  (monetary  unit)  of  one  coun- 
try expressed  in  the  terms  of  the  currency  of  another  country 
which  uses  the  same  metal  as  a  standard  of  value.  Thus,  $1 
in  United  States  gold  money  is  4. 11  shillings  or  4  shillings 
1.31  pence  in  English  gold  money  or  5  francs  18.26  centimes  in 
French  gold  money  or  4  reichsmarks  (marks)  19.79  pfennigs 
in  German  gold  money  or  2  guilders  (florins)  48.78  cents  in 
Netherlands  (Holland)  gold  money,  and  so  on. 

If  the  price  paid  for  a  bill  of  exchange  just  equals  the 
amount  forwhich  it  is  drawn  then  exchange  is  at  par ;  if  more  is 
paid  exchange  is  above  par ;  if  less  is  paid  exchange  is  below 
par. 

Between  a  gold  standard  country  and  a  silver  standard 
country  there  can  exist  no  fixed  par  of  exchange  for  the  rea- 
son that  silver,  unlike  gold,  has  not  a  fixed  value ;  in  other 
words,  silver  being  a  commodity  its  value  depends  on  the  state 
of  the  market  for  it. 

Parquet.     See  Paris  Bourse. 

Participating  bond.  Comparable  to  an  income  bond  inas- 
much as  the  return  to  the  holder  in  interest  depends  on  the 
extent  of  the  revenues  so  applicable. 

The  first  bonds  to  bear  this  name  were  issued  in   1002  and 


SMITH'S  FINANCIAL  DICTIONARY.  405 

■»yere  designated  "4  per  cent  and  participating  bonds."  These 
bonds  were  in  effect  collateral  as  well  as  income  bonds.  The 
company  which  issued  the  bonds  owned  stock  in  another  com- 
pany and  this  stock  was  deposited  and  pledged  as  security  for 
the  principal  of  the  bonds.  Interest  at  4  per  cent  was  guar- 
anteed by  the  company  which  issued  the  bonds  and  the  bonds 
were  also  entitled  to  receive  interest  in  excess  of  4  per  cent 
as  permitted  by  the  dividends  paid  on  the  stock  securing  the 
bonds  beyond  the  amount  necessary  first  to  provide  for  the  4 
per  cent  as  guaranteed. 

Partnership.  Joint  interest,  with  an  agreement  to  share 
the  profit  and  bear  the  loss  in  certain  proportions. 

If  one  of  two  partners  contributes  the  greater  part  or  the 
whole  of  the  capital  he  is  not  entitled  to  interest  on  his  cap- 
ital or  on  the  excess  unless  there  is  an  express  agreement  al- 
lowing him  interest.  In  the  absence  of  an  agreement  it  is  as- 
sumed that  the  other  partner's  contribution  of  time  or  skill  or 
both  was  regarded  in  the  understanding  between  the  part- 
ners as  equalizing  the  disproportion  of  capital.  If  there  is 
to  be  any  compensation  outside  of  a  division  of  the  profits  it 
must  be  provided  for  in  the  partnership  agreement. 

If  the  capital  of  a  firm  is  impaired  or  wholly  lost  the  deficit 
must  be  repaid  like  a  loss  of  any  other  kind.  There  is  no  dis- 
tinction between  an  impairment  of  capital  and  any  other  loss 
and  the  agreement  for  sharing  losses  applies  and  obtains.  A 
loss  is  equally  a  loss  whether  it  is  a  loss  of  capital  or  of  gains 
previously  made. 

A  partnership  is  not  liable  for  a  private  debt  of  any  of  its 
members,  but  any  member's  interest  in  the  property  of  the 
firm  may  be  levied  upon.  The  usual  procedure  is  to  sue  the 
mdividual  debtor  and  secure  judgment  against  him ;  execu- 
tion is  then  levied  upon  his  individual  property  and  if  this  is 
not  sufficient  to  satisfy  the  judgment  his  interest  in  the  part- 
nership property  may  be  levied  upon  and  sold. 

The  individual  insolvency  of  a  partner  when  determined  by 
bankruptcy  proceedings  or  acknowledged  by  an  assignment 
for  the  benefit  of  his  creditors  effects  an  immediate  dissolu- 
tion of  the  firm.  A  partner  may  be  actually  insolvent,  that  is, 
unable  to  pay  his  debts,  and  the  firm  still  may  continue.  But 
if  he  makes  an  assignment  for  the  benefit  of  his  creditors  or  if 


4o6  SMITH'S  FINANCIAL  DICTIONARY. 

his  bankruptcy  is  decreed  the  immediate  dissolution  of  the  firm 
becomes  necessary  in  order  that  the  share  in  it  of  the  insolvent 
may  be  ascertained  and  separated  from  the  shares  of  the  others 
and  placed  at  the  disposition  of  his  creditors. 

If  a  partnership  is  continued  beyond  the  time  originally 
fixed  and  no  new  terms  are  agreed  upon  it  becomes  a  con- 
tinued partnership.  Any  partner  may  then  declare  the  firm 
dissolved  whenever  he  chooses.  The  continued  partnership, 
however,  is  presumed  to  be  upon  the  same  terms  and  condi- 
tions, so  far  as  these  are  applicable,  as  those  which  obtained 
before  the  expiration  of  the  fixed  term.  A  clause  requiring  a 
partner  who  wishes  to  retire  to  notify  the  others  at  some  def- 
inite time  beforehand  is  no  longer  in  force,  because  such  an 
arrangement  is  incompatible  with  a  partnership  at  will. 

When  one  of  two  partners  dies  the  partnership  is  imme- 
diately dissolved  unless  there  is  a  provision  in  the  partnership 
agreement  to  the  contrary. 

Part-paid  stock.  That  which  subscribers  (persons  who 
subscribe  for  the  stock)  have  paid  for  only  in  part. 

Passenger  density.  A  term  used  in  railroad  accounting, 
meaning  the  result  obtained  when  the  total  number  of  miles  all 
passengers  were  carried  is  divided  by  the  number  of  miles  of 
road  operated. 

Passenger-mile  cost.  A  railroad  term,  meaning  the  average 
cost  per  mile  of  carrying  each  passenger. 

Passenger  miles.  A  railroad  term ;  the  number  of  miles, 
collectively,  traveled  by  all  passengers.  The  result  attained 
by  adding  together  the  number  of  miles  traveled  by  all  pas- 
sengers and  dividing  by  the  number  of  passengers  shows  the 
average  number  of  miles  traveled  by  each  passenger.  Pas- 
senger mileage  means  the  same  as  passenger  miles. 

Passenger  traffic.  Passengers  transported  by  a  railroad  or 
other  carrying  line. 

Passing  a  dividend.  Failure  to  declare  a  dividend  that  had 
previously  been  regularly  paid.  When  the  directors  vote  not 
to  pay  a  dividend  that  previously  had  been  regularly  declared 
the  dividend  is  stopped  ;  when  the  dividend  simply  is  not  de- 
clared it  is  passed. 

Passing  a  name.  London  Stock  Exchange  term ;  consists  in 
the  passing  by  the  buying  broker  to  the  seller  of  the  name  of 


SMITH'S  FINANCIAL  DICTIONARY.  407 

the  actual  buyer  for  the  purpose  of  preparing  the  transfer  deed, 
so-called.  If  the  jobber  who  sold  to  the  broker  is  not  (he  gen- 
erally is  not)  the  real  deliverer  he  passes  the  name  on  to  his 
seller  (the  one  who  sells  to  him),  and  so  on  until  the  name 
reaches  the  broker  or  jobber  who  sold  real  stock  and  is  pre- 
pared to  deliver  it.     See  Name  day. 

Passive  bond.  A  bond  not  bearing  interest  but  entitling 
the  holder  to  some  benefit.     An  income  bond  is  a  passive  bond. 

Pawned  stock.  London  Stock  Exchange  term  for  stock 
pledged  as  collateral. 

Pay.  Remuneration ;  recompense.  The  term  also  applies 
to  the  reputation  of  a  person  for  keeping  his  financial  engage- 
ments, as  he  is  good  pay  or  bad  pay,  sure  pay  or  slow  pay, 
etc. 

Payable  in  exchange.     See  In  exchange. 

Pay  day.  Same  as  account  day  or  settlement  day ;  the 
fourth  and  last  day  of  the  fortnightly  settlement  on  the  Lon- 
don Stock  Exchange,  when  securities  are  delivered  to  the  buy- 
er and  paid  for,  or  when,  if  they  are  neither  taken  up  (paid  for 
in  full)  nor  delivered  but  are  carried  over  to  the  next  settle- 
ment, the  differences  on  them  necessary  to  balance  the  ac- 
count are  either  paid  or  received,  as  the  case  may  be.  For  ad- 
ditional information  see  Settlement,  The. 

On  the  New  York  Stock  Exchange  there  is  a  settlement 
every  day  except  Saturday. 

Payee.  The  one  to  whom  a  check,  bill  of  exchange  or 
draft,  promissory  note  or  any  order  for  money  is  payable. 

Payer.  The  one  who  pays,  as  the  one  who  pays  a  bill  of 
exchange  or  draft  or  a  promissory  note. 

Paying  a  dividend.     For  information  see  Dividend. 

Paying-in  slip.  Same  as  credit  slip ;  English  name  for  the 
printed  form  upon  which  a  depositor  in  a  bank  enters  the 
amounts  of  checks,  money,  etc.,  to  be  placed  to  his  credit  in 
the  bank. 

Paying  teller.  The  clerk  in  a  bank  who  pays  out  money 
and  the  custodian  of  the  bank's  cash  ;  often  called  first  teller. 

Payment  bill.  The  abbreviated  name  for  a  bill  for  pay- 
ment ;  see  Bill  for  payment. 

Payment  for  honor.  Payment  by  a  party  other  than  the 
drawee    (the  one  drawn  upon)   of  a  bill  of  exchange    (draft) 


4o8  SMITH'S  FINANCIAL  DICTIONARY. 

which  has  not  been  honored  by  the  drawee.  The  purpose  is 
to  save  the  honor  (credit)  of  the  drawer,  who  is  looked  to  to 
protect  or  reimburse  the  one  who  makes  the  payment. 

Payment  stopped.  When  a  check  has  been  lost  or  stolen 
the  bank  upon  which  it  is  drawn  is  notified  to  stop  payment  on 
it  if  it  is  presented. 

Payment  supra  protest.  Payment,  after  protest,  by  a  party 
other  than  the  drawee  (the  one  drawn  upon)  of  a  bill  of  ex- 
change (draft)  which  has  not  been  honored  by  the  drawe-^. 
The  purpose  is  to  save  the  honor  (credit)  of  the  drawer,  who 
is  looked  to  to  protect  or  reimburse  the  one  who  makes  the 
payment. 

Pegged.  A  Wall  Street  colloquial  term  used  when  a  stock 
is  held  at  or  very  near  one  price;  when  the  price  of  a  stock  is 
kept  stationary. 

Penal  sum.  The  sum  stipulated  in  a  bond  to  be  paid  by  the 
obligor  (the  one  bound  to  perform  the  obligation)  in  case  he 
fails  to  fulfil  its  conditions. 

Penalty.  A  sum  of  money  stipulated  to  be  forfeited  and 
paid  in  case  of  the  non-performance  of  the  conditions  of  a 
contract. 

Penny.  A  bronze  coin  of  Great  Britain  equal  to  about  2 
cents.  The  name  penny  is  also  applied  colloquially  to  the 
United  States  cent. 

Per.  By  or  per  annum  (by  the  year  or  annually)  ;  per 
cent  (by  or  in  the  hundred).  When  one  person  writes  the 
name  of  another  person  followed  by  the  word  per  and  his  own 
name  per  means  by  the  writer  for  or  in  behalf  of  the  person 
whose  name  is  first  inscribed. 

Also  see  Per  procuration. 

Percentage.  Rate  per  hundred  or  proportion  in  a  hundred 
parts.  Thus,  i  per  cent  is  i  on  (or  in)  100.  For  instance,  a 
dividend  of  i  per  cent  means  $1  on  each  $100  of  stock.  In- 
terest at  5  per  cent  means  $5  on  each  $100  of  the  whole 
amount,  which  is  $50  on  a  bond  for  $1,000.  A  premium  of  3 
per  cent  is  v$3  on  each  $100. 

Tn  Great  Britain  prices,  dividends  and  interest  are  expressed 
in  percentages  when  stocks  and  bonds  are  spoken  of,  but  when 
shares  are  mentioned  it  is  more  usual  to  quote  in  fractions  of 
£1   or  in   sliillings  and  pence.     Thus,  the  price  of  Brighton 


SMITH'S  FINANCIAL  DICTIONARY.  409 

Railway  deferred  stock  is  £138  1-4  per  cent  and  its  dividend  is 
6  1-2  per  cent;  but  the  price  of  British  Electric  shares  is  £14 
1-8  and  the  dividend  is  18  shillings  per  share.  Premiums  fol- 
low the  same  rule,  being  quoted  in  percentage  on  stocks  and  in 
fractions  of  a  pound  or  in  shillings  and  pence  on  shares. 

In  insurance  in  Great  Britain  the  premium  is  the  considera- 
tion paid  annually  or  periodically  in  return  for  which  the 
company  agrees  to  pay  a  sum  at  the  death  of  the  insured  or 
on  his  arrival  at  a  certain  age.  it  is  calculated  in  pounds, 
shillings  and  pence  on  each  £100  of  the  amount  of  the  insur- 
ance. Thus,  a  premium  of  20  shillings  per  cent  means  that 
20  shillings  is  the  annual  premium  on  each    £100  insured. 

Per  contra.     On  the  other  side;  used  in  bookkeeping. 

Permanent  power  of  attorney.  \\  ritten  authority  to  act 
for 'another  until  revoked. 

Per  mille.  Per  thousand.  A  premium  or  charge  of  i  per 
mille  is  i  on  1,000,  which  is  equal  to  i-io  of  i  per  cent.  For 
instance,  if  the  Bank  of  France  charges  a  premium  of  i  per 
mille  for  gold  the  premium  is  i  franc  on  every  1,000  francs  of 
gold. 

Per  procuration.  Means  by  pow'er  of  attorney.  A  person 
who  signs  in  the  name  of  another  in  transacting  the  business 
of  the  latter  signs  per  procuration.  If  John  Jones  signs  per 
procuration  for  Richard  Smith  he  signs  "P.  p.  Richard  Smith" 
and  then  underneath  "John  Jones." 

Personal  properly.     A  movable  article  of  property;  chattel. 

A  contract  relating  to  personal  property  is  governed  by  the 
laws  of  the  state  in  which  it  is  made. 

Personal  security.  Any  security  that  is  not  real  estate 
offered  as  a  pledge  for  the  payment  of  debt. 

Petit  Bourse.  This  is  an  outside  market  for  securities  in 
Paris  held  in  the  evening. 

Petties.  Used  in  invoices  and  accounts ;  means  sundry 
items  of  charge  or  expense  too  small  to  be  enumerated  sepa- 
rately. 

Petty  cash  book.  A  book,  used  in  bookkeeping,  in  which 
are  entered  small  payments  so  that  they  mav  be  posted  in  a 
lump  sum  instead  of  separately. 

Physical  condition.  The  condition  or  state  of  a  property; 
in  the  case  of  a  railroad  the  condition  or  state  of  the  structure 


410  SMITHS  FINANCIAL  DICTIONARY. 

(roadbed  and  buildings)  and  equipment  (locomotives,  cars 
and  other  apparatus  for  handling  traffic  and  machinery  in 
shops). 

Piece-of-eight.  The  old  Spanish  peso  of  Mexico  is  some- 
times called  the  piece  of  eight  reals  (real  being  derived  from 
rey,  a  king). 

Piece  of  paper.  A  term  applied  to  a  promissory  note  or 
bill  of  exchange   (draft). 

Piker.  A  Wall  Street  colloquialism,  meaning  a  trader  in 
small  lots  of  stocks. 

Piking.  A  Wall  Street  colloquialism,  meaning  trading  in 
small  lots  of  stocks. 

Pinched  out.  London  Stock  Exchange  term  for  a  mining 
reef  (lode  or  deposit  of  metal)  that  has  disappeared  or  been 
worked  out. 

Pinholed.  AMien  a  stock  certificate  is  punctured  with 
numerous  pinholes  they  furnish  evidence  that  the  certificate 
has  had  numerous  sale  tickets  (memoranda  of  sale)  pinned 
to  it — that  it  has  changed  hands  numerous  times. 

When  stock  certificates  bearing  date  materially  earlier  than 
that  on  which  purchasers  receive  them  are  appearing  in  large 
numbers  without  pinholes  it  is  taken  as  evidence  of  the  un- 
loading of  permanent  holdings.  Were  the  stock  numerously 
pinholed  the  inference  would  be  that  it  was  floating  stock — 
stock  in  regular  use  in  speculative  operations. 

Pistole.  A  former  gold  coin  of  Spain  worth  one-fourth 
doubloon,  equal  to  $3.93.47. 

Pit  trader.  A  name  applied  to  a  grain  broker  who  trades 
(speculates)  for  his  own  profit  or  loss  on  an  exchange  or 
board. 

The  particular  place  on  the  floor  of  the  exchange  or  board 
where  trading  in  grain  is  conducted  is  called  the  pit ;  it  is  gen- 
erally circular  in  shape  with  steps  leading  down  from  an 
outside  raised  platform  to  the  clear  space  on  the  floor  where 
the  traders  stand. 

Placing  a  stock  or  placing  bonds.  Same  as  floating  a  stock 
or  floating  bonds;  marketing;  selling.  The  term  is  generally 
applied  to  the  aisposal  of  an  entire  issue  of  stock  or  bonds,  or 
at  least  a  large  part  of  an  issue. 

Plain  bond.     A  bond  not  secured  by  mortgage  or  collateral 


SMITH'S  FINANCIAL  DICTIONARY.  411 

and  without  a  sinking  fund  provision.  A  debenture  bond 
being  (as  a  rule)  merely  a  promissory  note  in  the  form  of  a 
bond  is  a  plain  bond. 

Plant.  The  permanent  income-producing  equipment  of  a 
company.  For  instance,  the  plant  of  a  manufacturing  com- 
pany consists  of  its  works,  usually  including  the  land  upon 
which  they  stand-.  The  plant  of  a  telegraph  or  telephone  com- 
pany consists  of  its  wires,  instruments,  etc.  The  plant  of  a 
gas  company  consists  of  its  generating  houses,  tanks,  mains 
and  meters. 

Pledge.  To  pledge  is  to  hypothecate  or  pawn ;  to  place  (as 
stocks'or  bonds)  in  the  hands  of  another  as  security  for  a  debt. 
The  property  so  placed  or  hypothecated  is  a  pledge. 

Pledgee.  The  one  to  whom  anything  is  pledged ;  specific- 
ally, the  one  to  whom  personal  property  is  pledged  as  security 
for  a  debt. 

Pledger.  One  who  gives  a  pledge ;  who  hypothecates  per- 
sonal property  as  security  for  a  debt. 

Plunger.  A  Wall  Street  colloquialism,  meaning  a  specula- 
tor who  trades  heavily  and  takes  great  chances. 

Point.  In  stocks  a  point  is  i  per  cent;  in  cotton  and  cofifee 
one-hundredth  of  a  cent. 

Also,  as  a  Wall  Street  colloquialism,  a  point  is  advance  in- 
formation or  a  suggestion  of  supposed  value ;  same  as  tip, 
which  is  another  colloquialism. 

Pointer.  A  W^all  Street  colloquial  appellation  for  one  who 
imparts  points;  see  Point. 

Pony.     English  colloquialism  for   £25. 

Pool.  This  term  applies  when  interests  join  together  for 
mutual  advantage. 

The  anthracite  coal  pool,  as  it  formerly  existed,  was  an 
agreement  whereby  each  company  belonging  to  the  pool  was 
to  mine  a  certain  percentage  of  the  total  production.  The 
production  for  each  month  was  determined  in  the  preceding 
month.  The  purpose  of  the  pool  was  regulation  of  both  out- 
put and  prices.  By  restricting  the  output  to  the  consumptive 
demand  control  of  prices  was  accomplished.  A  schedule  of 
prices  was  prepared  for  each  month  and  all  the  companies 
made  sales  of  coal  in  accordance  with  it.  The  anthracite  coal 
pool  was  declared  illegal  by  the  courts  on  the  ground  that  it 
was  in  restraint  of  trade. 


412  SMITH'S  FINANCIAL  DICTIONARY. 

In  manufacturing  pools  are  often  formed.  Formerly  the 
manufacturers  of  steel  rails  joined  in  a  pool.  The  pool  fixed 
prices  and  each  concern  was  allowed  to  make  and  sell  a  cer- 
tain percentage  of  the  total  output  of  rails. 

A  freight  pool  formerly  was  an  arrangement  whereby  rail- 
roads (or  other  transportation  lines)  divided  among  them- 
selves the  tonnage  for  which  they  were  all  competing.  For 
instance,  the  business  between  New  York  and  Chicago  for- 
merly was  divided  among  the  roads  handling  it.  Each  road 
was  allowed  a  certain  percentage  of  the  whole.  When  a  road 
was  ahead  of  its  percentage  (had  carried  more  than  its  percent- 
age) it  had  to  even  up  (this  being  the  term  used)  by  trans- 
ferring freight  received  by  it  to  roads  which  were  behind 
their  percentage.  This  was  called  a  tonnage  pool.  At  one  time 
a  money  pool  was  in  existence.  In  this  pool  a  road  that  had 
carried  more  than  its  percentage  had  to  pay  over  in  money  the 
amount  received  for  carrying  the  freight  in  excess  of  its  per- 
centage. This  money  went  to  roads  which  carried  less  than 
their  percentages.  A  passenger  pool  was  based  on  the  same 
general  principles  as  a  freight  pool.  To  secure  a  distribution 
of  business  in  accordance  with  the  percentages  allotted  differ- 
ential rates  (lower  rates)  were  permitted  to  be  charged  by 
roads  not  advantageously  situated  or  not  having  as  attractive 
a  service  as  other  roads.  Also,  where  it  was  possible,  traffic 
was  diverted  from  lines  ahead  of  their  percentages  to  lines 
behind  their  percentages  in  order  to  even  up.  A  money 
pool  in  the  passenger  business  operated  in  the  same  way  as  a 
money  pool  in  the  freight  business. 

Pools,  for  the  most  part,  have  been  terminated  by  the  In- 
terstate commerce  law  and  by  the  national  anti-trust  law 
and  the  anti-trust  laws  of  the  various  states. 

Also,  the  term  pool  is  applied  to  a  fund  contributed  by  sev- 
eral persons  for  the  purpose  of  undertaking  a  speculation. 
When  a  pool  is  formed  in  a  stock  in  order  to  manipulate  the 
stock  the  contributors  to  the  pool  (mutual  fund)  appoint  a 
manager  of  it  who  conducts  the  operations  in  the  stock.  If  it 
is  a  bull  pool  the  first  step  is  to  buy  as  much  stock  as  is  desired 
at  as  low  prices  as  possible  and  then  by  means  of  wash  trans- 
actions (see  Washing)  in  the  stock  advance  the  price  to  a 
])()int  where  the  stock  actually  held  can  be  sold  at  a  satisfactory 


SMITH'S  FINANCIAL  DICTIONARY.  413 

profit.  If  it  is  a  bear  pool  the  first  step  is  to  sell  short  (sell 
stock  not  owned)  to  the  extent  desired  at  as  high  prices  as 
possible  and  then  by  means  of  wash  transactions  in  the  stock 
depress  the  price  to  a  point  where  the  stock  actually  sold  short 
can  be  bought  back  at  a  satisfactory  profit. 

Stock  holdings  are  sometimes  pooled  (or  put  in  a  pool)  to 
obtain  control  or  tie  up  control  of  a  company. 

Poor  debtor.     An  insolvent  debtor. 

Port  of  entry.  A  port  on  navigable  water  where  is  located 
a  custom  house  for  the  entry  of  vessels  and  the  receipt 
of  duties  collectable  on  goods  brought  from  foreign  countries. 

Position.  In  dealing  in  futures  (contracts  maturing  in  the 
future)  in  grain,  cotton,  coffee,  etc.,  it  is  the  practise 
to  designate  the  contracts  by  the  names  of  the  months 
in  which  they  mature.  Thus,  wheat  sold  for  delivery  in 
January  is  called  January  wheat ;  cotton  sold  for  delivery  in 
July  is  called  July  cotton,  and  so  on.  The  outlook  in  the  mar- 
ket for  the  dififerent  months  is  called  the  position.  Thus,  if  the 
market  for  January  wheat  is  strong  it  is  customary  to  say  that 
the  January  position  (in  wheat)  is  strong;  or,  if  the  market  for 
July  cotton  is  weak  it  is  customary  to  say  that  the  July  position 
( in  cotton)  is  weak. 

Post.  On  the  New  York  Stock  Exchange  a  post  is  a  stand- 
ard or  pillar  rising  from  the  floor  to  mark  the  place  where  a 
particular  stock  is  dealt  in.  The  New  York  Central  post,  for 
instance,  is  where  New  York  Central  &  Hudson  River  Rail- 
road stock  is  dealt  in.  At  most  posts  two  or  more  stocks  are 
dealt  in  as  there  are  not  enough  posts  to  allow  one  for  each 
stock  dealt  in  on  the  exchange. 

Post-bill.     See  Bank  of  England  post-bill. 

Postdated.  Bearing  a  future  date.  A  check  dated  ahead 
is  a  postdated  check.  When  a  check  is  paid  before  the  date 
written  on  it  the  money  so  paid  can  be  recovered. 

Post  day.  London  term  for  the  day  on  which  the  dealers 
in  foreign  bills  (foreign  exchange  bills)  meet  in  the  Royal  Ex- 
change to  transact  business. 

Posted  rates.  The  preliminary  or  asking  rates  or  prices  of 
a  seller  of  foreign  exchange.  The  posted  rates  are  usually 
the   rates   exacted   for   small   amounts   of   exchange,   whereas 


414  SMITH'S  FINANCIAL  DICTIONARY. 

large   amounts  are  sold  at  the  actual   rates.     For   additional 
information  see  Foreign  exchange  rates. 

Posting.  A  bookkeeping  term,  meaning  the  transferring  of 
entries  in  subsidiary  books  to  the  respective  accounts  in  the 
ledger. 

Postoffice  money  order.  An  order  purchased  at  a  post- 
ofifice  in  one  place  which  is  payable  at  a  postoffice  in  another 
place  to  a  party  named  when  the  order  is  purchased.  Such 
an  order  is  in  fact  a  bill  of  exchange  or  draft.  The  order  is 
forwarded  by  mail  by  the  purchaser  to  the  payee  (the  one  to 
whom  the  amount  of  it  is  to  be  paid). 

Orders  payable  in  the  United  States  are  called  domestic 
money  orders.  Orders  also  are  issued  payable  abroad ;  these 
are  called  international  money  orders.  The  charge  for  these 
orders  is  the  amount  of  them,  plus  a  moderate  commission. 

Pound.  £  ;  the  unit  of  value  of  Great  Britain  (gold  stand- 
ard), equal  to  $4.86.85.  The  pound  is  also  the  unit  of  value  of 
Egypt   (gold  standard),  equal  to  $4.94.30. 

There  is  no  British  coin  of  the  name,  but  the  value  of  the 
sovereign  is  one  pound  (£1).  The  pound  sterling  was  orig- 
inally a  pound  weight  of  silver  divided  into  twenty  parts 
called  shillings  and  each  shilling  was  divided  into  twelve  parts 
called  pennies  or  pennyweights.  It  takes  twenty-six  of  the 
present  shilling  pieces  to  make  a  pound  in  weight. 

The  pound  sterling  and  the  pound  Egyptian  are  the  largest 
monetary  units  in  use. 

Poundage.     English  ;  a  charge  of  so  much  in  the  pound  (  £)• 

Power  of  attorney.     Written  authority  to  act  for  another. 

A  general  power  of  attorney  confers  authority  to  act  in 
matters  generally ;  a  permanent  power  of  attorney  is  good 
until  revoked ;  a  special  power  of  attorney  is  good  only  for  the 
specific  act  which  it  covers.  An  irrevocable  power  of  attorney 
is  used  in  transactions  in  stocks  and  bonds. 

P.  p.  These  letters  stand  for  per  procuration ;  see  Per  pro- 
curation. 

PR.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  moan  preferred,  as  preferred  stock. 

Precedence  in  dealings.     See  Floor  rules. 

Preference  stock.  This  is  the  English  designation  for  stock 
that  is  preferred  over  other  classes  as  to  dividends  and  assets. 


SMITH'S  FINANCIAL  DICTIONARY.  413 

It  is  equivalent  to  what  in  the  United  States  is  called  preferred 
stock  when  there  is  only  one  class  of  preferred  stock  or  to 
what  is  called  first  preferred  when  there  are  two  classes. 
Preference  stock  is  sometimes  divided  into  classes,  as  first 
preference,  second  preference,  etc.,  with  the  right  to  dividends 
in  the  order  named. 

For  additional  information  see  Stock. 

Preferred  creditor.  A  creditor  who  is  entitled  by  law  to 
have  his  claim  first  satisfied  from  his  debtor's  assets.  The 
holder  of  a  first  mortgage  or  other  prior  lien  is  a  preferred 
creditor. 

Preferred  ordinary  stock.  English ;  also  called  B  stock ; 
receives  a  dividend  at  a  fixed  rate  before  any  payment  can  be 
made  on  the  deferred  ordinary  stock.  For  additional  informa- 
tion see  Preferred  stock. 

Preferred  stock.  Stock  that  is  preferred  as  to  dividends  and 
assets;  it  must  receive  a  dividend  before  a  dividend  can  be 
paid  on  the  common  stock  and  in  a  distribution  of  assets  it 
participates  ahead  of  the  common  stock.  Cumulative  pre- 
ferred stock  is  stock  the  dividends  on  which,  if  not  paid  regu- 
larly or  in  full,  accumulate  and  must  be  paid  in  the  future  be- 
fore a  dividend  can  be  paid  on  the  common  stock. 

Preferred  stock  is  the  English  designation  for  preferred  or- 
dinary (common)  stock.  When  for  dividend  purposes  the 
ordinary  stock  of  a  company  has  been  divided  into  two  pares 
called  preferred  or  "B"  stock  and  deferred  or  "A"  stock  the 
dividend  on  the  A  stock  is  deferred  until  a  fixed  amount  has 
been  paid  on  the  B  stock. 

This  B  or  preferred  stock  is  not  the  same  as  preferred  stock 
in  the  United  States.  What  in  the  United  States  is  called 
preferred  stock  is  in  Great  Britain  called  preference  stock 
and  preference  stock  in  Great  Britain  may  be  divided  into 
two  or  more  classes  called  first  preference,  second  preference, 
etc.,  just  as  preferred  stock  in  the  United  States  may  be 
divided  into  two  or  more  classes  called  first  preferred,  second 
preferred,  etc.  When,  however,  there  is  but  one  class  of  pref- 
erence stock  ahead  of  an  ordinary  stock  in  Great  Britain  the 
B  or  preferred  stock  is  equivalent  to  second  preferred  stock 
in  the  United  States. 

Preference  stock  is  sometimes  divided  into  classes,  as  first 


4i6  SMITH'S  FINANCIAL  DICTIONARY. 

preference,  second  preference,  etc.,  with  the  right  to  dividends 
in  the  order  named. 

Premium.  The  amount  paid  in  excess  of  the  par  (face) 
value. 

When  a  stock,  for  instance,  is  seUing  at  a  premium  the 
premium  is  the  amount  it  brings  beyond  its  par  or  face  value. 

When  a  stock  is  lending  at  a  premium  (see  Borrowing  and 
lending  stocks)  the  premium  is  the  amount  paid  by  the  bor- 
rower of  the  stock  to  the  lender  of  it  for  the  use  of  it.  The 
purpose,  usually,  for  which  a  stock  is  borrowed  is  to  enable 
the  borrower,  who  has  sold  it  short  (sold  stock  he  did  not  pos- 
sess), to  make  delivery  to  the  purchaser. 

In  Great  Britain  when  a  stock  or  other  security  is  at  a 
premium  the  premium  is  reckoned  at  so  much  in  the  pound  on 
shares  and  at  a  percentage  on  stock  or  bonds.     See  Percentage. 

In  insurance  in  Great  Britain  the  premium  is  the  considera- 
tion paid  by  the  policy  holder  for  insurance.  Thus,  a  premium 
of  20  shillings  per  cent  means  that  20  shillings  is  the  premium 
on  each  £  100  insured. 

For  information  as  to  premium  on  gold  see  Gold  premium. 

Presentation.  In  financial  and  commercial  usage  prefer- 
ence is  given  to  the  word  presentation  over  presentment  as 
employed  in  connection  with  negotiable  instruments,  such  as 
bills  of  exchange  (drafts)  and  promissory  notes.  For  in- 
stance, it  is  customary  in  financial  and  commercial  phraseolo- 
gy to  say  "on  presentation"  (for  acceptance  or  payment)  in- 
stead of  "on  presentment."  In  legal  usage  preference  is  given 
to  the  word  presentment. 

Presentment.     See  Presentation. 

President.  The  chief  executive  ofificcr  of  a  stock  company 
IS  the  ])resident  and  he  also  presides  (is  chairman)  at  meetings 
of  the  board  of  directors,  except  when  the  office  of  chairman  of 
the  board  exists  in  addition  to  the  office  of  president. 

The  president  of  a  bank  is  its  executive  head.  In  Great 
Britain  the  head  of  a  bank  is  the  governor,  as  in  the  case  of 
the  Bank  of  England,  or  the  manager;  in  Canada  the  head  of 
a  bank  is  the  manager  general  or  manager  resident. 

Price.     The   amount   at  which  anything  is  valued  or  sold. 

Also  sec  Quotation. 

Price  current.     A  printed  or  partly  printed  and  partly  writ- 


SMITH'S  FINANCIAL  DICTIONARY.  417 

ten  form  issued  periodically  by  brokers,  dealers  and  others  to 
customers  in  their  trades  showing  the  current  prices  of  the 
goods  they  deal  in. 

Price-mark.  The  name  given  to  a  word  or  to  words  or  to 
a  cipher  or  other  secret  device  used  by  a  merchant  or  other 
dealer  to  mark  on  goods  their  cost  price  and  perhaps  also 
their  selling  price,  although  as  a  rule  the  selling  price  is 
marked  in  plain  figures. 

In  a  price-mark  letters  or  signs  stand  for  the  figures  or- 
dinarily used.     An  example  of  a  price-mark  follows : 


I       2 

3 

4 

5 

6 

7 

8 

9 

0 

V    A 

N 

D 

E 

R 

B 

I 

L 

T 

Another  example : 

I     2 

3 

A 

5 

6 

7 

8 

9 

0 

C    H 

E 

L 

M 

S 

F 

0 

R 

D 

Another  example : 

I     2 

3 

4 

5 

6 

7 

8 

9 

0 

C    A 

L 

E 

B 

S 

M 

I 

T 

H 

Another  example : 

I     2 

3 

4 

5 

6 

7 

8 

9 

0 

M    A 

K 

E 

P 

R 

0 

F 

I 

T 

What  is  known  as  the  old-fashioned  price-mark  is  derived 
from  the  following  device  : 

# 

It  is  employed  as  follows,  with  the  addition  of  X  or  O  for 

the  naught : 

1234567890 

JULDDE   nnrx 

Primarily  liable.  The  person  primarily  liable  on  a  negotia- 
ble instrument  is  the  person  upon  whom  rests  the  absolute  re- 
quirement to  pay  it ;  all  other  parties  are  secondarily  liable. 

The  maker  of  a  note  is  primarily  liable,  while  an  indorser  is 
secondarily  liable.  When  a  draft  has  been  accepted  the  ac- 
ceptor is  primarily  liable,  while  the  drawer  is  secondarily  lia- 
ble. When,  however,  a  draft  has  not  been  accepted  the  draw- 
er is  primarily  liable.  The  drawer  (issuer)  of  a  check  is  prim- 
rrily  liable,  while  an  indorser  is  secondarily  liable.  An  in- 
dorser is  always  secondarily  liable. 

Primary  points.  Trade  designation  for  large  cities  which 
receive  grain  direct  from  country  shippers,  such  as  Chicago, 


4i8  SMITH'S  FINANCIAL  DICTIONARY. 

Detroit,   Duluth,   Kansas    City,   Minneapolis,   St.    Louis   and 
Toledo. 

Primary  receipts.  Trade  designation  for  the  aggregate 
daily  receipts  of  grain  at  the  leading  primary  points ;  see 
Primary  points. 

Primary  shipments.  Trade  designation  for  the  aggregate 
daily  shipments  of  grain  from  the  primary  points ;  see  Primary 
points. 

Prime  bills  or  prime  exchange.  Bills  of  exchange  (specific- 
ally foreign  exchange)  issued  by  houses  of  unquestioned  finan- 
cial ability. 

Principal.  The  capital  sum  upon  which  interest  is  payable; 
also,  the  one  who  employs  a  broker  or  other  agent. 

A  principal  is  responsible  for  the  act  of  an  agent,  but  an 
agent  who  exceeds  his  authority  renders  himself  personally 
liable. 

A  person  who  has  given  money  to  his  own  agent  to  be  de- 
livered to  his  creditor  cannot  set  up  the  claim  that  he  has  paid 
his  creditor  unless  the  money  actually  reaches  the  creditor.  In 
other  words,  while  the  money  is  in  the  control  of  the  agent  of 
the  debtor  it  is  at  the  debtor's  risk  and  it  cannot  be  charged 
against  the  creditor  any  more  than  if  it  remained  in  the  debt- 
or's own  hands. 

For  additional  information  see  Agent. 

Prior  lien.     A  lien  or  claim  ahead  of  all  other  liens  or  claims. 

Prior  lien  bond.  A  bond  representing  a  lien  or  claim  ahead 
of  all  other  liens  or  claims. 

Private  banker.  A  person  engaged  in  the  business  of  bank- 
ing who  is  not  subject  to  supervision  by  national  or  state  au- 
thorities. 

Since  the  enactment  of  the  National  bank  act  there  has  been 
no  incentive  for  private  bankers  to  avail  themselves  of  the 
provision  of  state  laws.  As  they  do  not  now  issue  circulating 
notes  they  prefer  to  conduct  their  business  without  state  in- 
terference. 

Private  carrier.  One  who  carries  persons  or  goods  only  by 
special  arrangement. 

Private  company.  English  ;  a  term  applied  (in  contradistinc- 
tion to  a  public  company)  to  a  company  public  subscription  to 
the  stock  of  which  is  not  invited.    When  a  private  business  is 


SMITH'S  FINANCIAL  DICTIONARY.  419 

continued  as  a  corporation  instead  of  a  partnership  and  stock 
is  allotted  to  each  partner  for  his  interest  or  share  in  the  busi- 
ness the  business  is  said  to  have  been  converted  into  a  private 
company.  An  entirely  new  business  or  enterprise,  however, 
may  be  and  often  is  started  as  a  private  company  instead  of 
a  partnership.  Usually  there  is  an  agreement  among-  the 
shareholders  (stockholders)  whereby  each  is  prohibited  from 
disposing  of  or  transferring  his  shares  without  the  consent  of 
the  others. 

What  in  Great  Britain  is  termed  a  private  company  is  in  the 
United  States  known  as  a  close  corporation. 

Private  discount.  In  foreign  money  markets  this  is  the 
rate  of  discount  quoted  by  others  than  the  national  or  govern- 
ment banks;  it  is  usually  designated  as  open  market  discount; 
see  Open  market  discount. 

Private  wire.  A  wire  leased  from  a  telegraph  company  by  a 
broker  or  by  any  body  for  his  exclusive  use. 

Private-wire  house.  A  brokerage  concern  which  has  private 
telegraph  wires  to  its  branch  offices  or  to  the  offices  of  corre- 
spondents at  other  points.  The  telephone  has  superseded  the 
telegraph  to  some  extent ;  private  telephone  wires  are  hired 
the  same  as  private  telegraph  wires. 

Privilege.  A  general  name  for  a  call,  put,  spread  or  strad- 
dle, information  as  to  each  of  which  is  furnished  under  its  own 
title. 

There  can  be  no  loss  to  the  buyer  of  a  privilege  beyond  the 
amount  paid  for  it.  Privileges  are  legal  and  are  enforceable  as 
contracts,  but  they  are  not  recognized  by  the  New  York  Stock 
Exchange. 

i'nvileges  are  often  bought  as  a  protection  against  loss  on 
transactions  in  the  stock  market.  Illustration :  One  hundred 
shares  of  stock  are  bought  at  100.  A  put  under  which  the 
stock  can  be  delivered  at  98  is  purchased  for  i  per  cent,  which 
makes  the  net  price  of  the  put  97.  Then,  if  the  stock  goes 
down  to,  say,  94  the  stock  owned  by  the  holder  of  the  put  can 
be  put  (delivered)  to  the  issuer  of  the  put  at  98  so  that  the 
net  loss  is  only  3  per  cent  instead  of  6  per  cent  as  would  be  the 
case  if  no  put  had  been  bought  and  the  stock  had  to  be  sold  at 
94.     On  the  other  hand,  should  the  stock  go  up  to,  say,  106 


420  SMITH'S  FINANCIAL  DICTIONARY. 

only  the  cost  of  the  put,  i  per  cent,  would  have  to  be  deducted 
from  the  profit  on  the  stock. 

In  the  case  of  a  stock  sold  short  a  call  would  be  employed 
for  protection  against  loss.  If  the  stock  were  sold  short  at 
loo  and  if  a  call  at  102  were  purchased  for  i  per  cent  and  the 
stock  advanced  to  106  the  net  loss  would  be  only  3  per  cent, 
as  against  6  per  cent  if  no  call  had  been  purchased  and  the 
stock  had  to  be  covered  (bought  back)  at  106.  If  the  stocK 
against  which  the  put  was  bought  went  down  to  94  only  a  de- 
duction of  I  per  cent,  the  cost  of  the  put,  would  have  to  be 
maae  from  the  profit  on  the  stock. 

Calls  and  puts  on  grain  are  based  on  the  same  general  prin- 
ciples as  those  on  stocks,  but  they  are  not  employed  to  any 
extent  except  to  limit  loss.  In  some  states  puts  and  calls  on 
grain  are  illegal. 

Privilege  broker.  A  broker  who  handles  or  deals  in  privi- 
leges— that  is,  puts,  calls,  spreads  and  straddles. 

Procuration.     See  Per  procuration. 

Professional  speculation.  Speculation  (as  in  stocks,  grain, 
cotton,  coffee,  etc.)  by  men  who  are  adepts  in  it  or  who  make 
a  regular  business  of  it. 

Professional  speculator.  One  who  is  adept  at  or  who  makes 
a  regular  business  of  speculation  (as  in  stocks,  grain,  cotton, 
cofifee,  etc.). 

Profit.  Excess  of  receipts  over  expenditures.  Gross  profit 
is  the  remainder  after  deduction  of  first  cost ;  net  profit  is  the 
remainder  after  deduction  of  cost  and  all  charges  (as  interest 
or  wages,  etc.). 

Profit  and  loss  account.  The  surplus  income  account.  In 
a  balance  sheet  a  profit  and  loss  deficit  appears  as  a  debit ;  a 
profit  and  loss  surplus  appears  as  a  credit. 

The  profit  or  loss  of  a  company  is  shown  by  the  change  in 
the  profit  and  loss  item.  This  change,  plus  dividends  paid, 
shows  the  actual  profit. 

Pro  forma.  For  the  sake  of  form ;  the  term  is  frequently 
used  in  mercantile  business. 

A  pro  forma  account  is  a  specimen  statement  showing  what 
it  is  considered,  in  the  current  state  of  the  market,  goods 
would  realize.  Such  an  account  is  in  the  same  form  as  one 
used  in  an  actual  transaction  except  that  the  prices  are  tenta- 


SMITH'S  FINANCIAL  DICTIONARY.  4^1 

tive — are  examples  merely.  The  purpose  of  a  pro  forma  ac- 
count is  to  furnish  to  the  one  to  whom  it  is  rendered  or  sent 
the  value  or  cost  of  a  consignment  or  shipment  of  goods  in  the 
existing  state  of  the  market. 

A  pro  forma  account  sales  is  asked  for  by  a  prospective 
seller  of  goods  on  consignment  (consignor)  when  he  desires 
to  know  what  sum  goods  which  he  has  for  disposal  would 
bring. 

A  pro  forma  invoice  is  asked  for  by  a  prospective  purchaser 
who  desires  to  obtain  from  the  seller  prices  and  charges  on 
certain  goods. 

Promissory  note.  A  written  engagement  by  one  person  to 
pay  unconditionally  to  another  therein  named  (or  to  his  or- 
der or  to  the  bearer)  a  certain  sum  of  money  at  a  specified 
time. 

A  note  bears  interest  before  maturity  only  when  so  stated. 
"Value  received"  is  usually  written  in  a  note  but  is  not  nec- 
essary ;  if  not  written  it  is  presumed  by  the  law  to  be  or  the 
deficiency  may  be  supplied  by  proof.  If  the  amount  stated  in 
words  and  the  amount  stated  in  figures  do  not  agree  the  words 
govern. 

A  note  given  without  consideration  cannot  be  enforced  by  a 
holder  having  knowledge  of  that  fact,  but  a  note  given  without 
consideration  may  be  enforced  by  a  person  not  having  a 
knowledge  of  that  fact  who  purchased  it  for  a  consideration. 

If  the  holder  of  a  note  fails  to  present  it  for  payment 
promptly  at  maturity  the  maker  is  not  thereby  discharged 
from  his  liability.  If  the  note  was  payable  at  a  specified  place 
and  the  maker  was  there  at  the  date  when  due  prepared  to 
pay  it  this  amounted  to  a  legal  tender  of  payment  and  the 
maker  cannot  thereafter  be  charged  with  interest  as  being  in 
default.  But  the  principal  of  the  note  he  is  still  legally  bound 
to  pay. 

If  there  are  other  persons  who  are  only  secondarily  liable  up- 
on the  paper,  (indorsers  or  others  who  have  undertaken  to 
pay  it  if  it  is  promptly  presented  to  the  person  primarily  lia- 
ble upon  it,  that  is,  the  maker,  and  by  him  dishonored)  they 
will  be  released  if  prompt  presentation  be  not  made  to  the  orig- 
inal party,  that  is,  the  maker.  But  the  obligation  of  the  latter 
is.  absolute  and  not  dependent  upon  any  such  condition  as 
prompt  presentation. 


422  SMITH'S  FINANCIAL  DICTIONARY. 

When  a  note  is  payable  at  a  bank  or  any  other  specified 
place  it  is  the  duty  of  the  holder  to  present  it  at  the  bank  or 
place  promptly  on  the  day  when  it  becomes  due.  The  holder 
is  liable  for  any  loss  resulting  from  the  failure  to  make  due 
presentation.     But  if  there  is  no  loss  there  is  no  liability. 

In  New  York  state  a  note  made  payable  at  a  bank  in  which 
the  maker  is  a  depositor  constitutes  an  order  to  the  banR  to 
pay  the  same  as  if  it  were  a  check.  Neither  form  of  paper 
takes  precedence  of  the  other  and  the  bank  is  to  pay  them  in 
the  order  in  which  they  are  presented  . 

When  a  creditor  consents  to  take  in  payment  of  a  debt  a 
bill  or  note  payable  at  a  future  day  this  act  constitutes  an 
agreement  for  delay.  The  debt  is  not  extinguished,  but  the 
creditor  cannot  begin  an  action  upon  it  until  the  bill  or  note 
falls  due  and  default  in  payment  is  made. 

In  the  case  of  a  note  made  in  one  state  and  payable  in  an- 
other state  any  question  as  to  its  legality  must  be  tested  in  the 
state  where  it  is  payable.  Interest  is  chargeable  at  the  legal 
rate  in  the  state  where  the  note  is  payable. 

If  a  note  is  lost  or  stolen  the  maker  is  not  released  from 
payment ;  he  must  pay  it  if  the  consideration  for  which  it  was 
given  and  the  amount  can  be  proved. 

When  a  note  is  discounted  by  a  bank  with  which  the  maker 
has  an  account  the  amount  of  the  note  must  be  charged 
against  the  account  otherwise  the  indorsers,  if  there  be  any, 
are  released  from  responsibility. 

If  A  buys  of  B  on  credit  and  it  is  not  specified  that  a  note 
shall  be  given  for  the  indebtedness  the  buyer  cannot  be  com- 
pelled to  give  a  note  unless  there  is  a  custom  of  the  trade  to 
that  effect  or  unless  the  previous  course  of  dealing  between 
the  two  has  been  such  as  to  imply  an  agreement  that  a  note 
should  be  executed  to  cover  the  indebtedness. 

For  additional  information  see  Collateral  note ;  also  see  Ne- 
gotiable instrument. 

Promoter.  One  who  especially  assists,  by  securing  capital, 
in  starting  or  forwarding  (promoting)  a  company.  This  com- 
pensation (pay)  is  generally  in  stock  of  the  company  (and  gen- 
erally in  common  stock  if  both  preferred  and  common  are 
issued). 


SMITH'S  FINANCIAL  DICTIONARY.  423 

Promoter's  stock.  Stock  issued  to  a  promoter  for  his  ser- 
vices in  promoting  or  aiding  in  the  organization  of  a  company  ; 
see  Promoter. 

Prompt.  A  commercial  term,  meaning  the  date  fixed  for 
payment.  When  goods  are  sold  with  a  prompt  the  goods 
must  be  taken  up  and  paid  for  on  the  date  specified.  Thus, 
when  goods  are  sold  with  a  60-day  prompt  the  buyer  must  re- 
ceive and  pay  for  the  goods  at  the  end  of  60  days. 

Prompt  cash.     Immediate  cash  payment. 

Prompt  note.  A  commercial  term ;  a  note  or  memorandum 
delivered  by  the  seller  to  the  purchaser  of  goods  specifying  the 
sum  due  and  the  date  of  payment. 

Proof  piece.  One  of  the  first  coins  struck  from  a  new  die, 
which  may  be  the  die  for  a  new  coin  or  a  new  die  for  an  old 
coin.  It  is  a  perfect  coin,  specially  polished,  and  is  prized  by 
numismatists.  New  dies  for  all  coins  are  employed  at  the  be- 
ginning of  each  year  bearing  the  date  of  the  new  year  and 
old  dies  bearing  the  date  of  the  preceding  year  are  destroyed. 

Proportion  of  reserve  to  liabilities.  This  term  is  applied  to 
the  percentage  of  its  deposits  held  in  cash  by  a  bank.  See 
Reserve. 

Proprietary  company.  One  which  owns,  or  at  least  owns 
control,  of  another  company,  while  not  operating  it;  same  as 
controlling  company. 

Prospectus.  A  paper  or  pamphlet  containing  information 
as  to  a  proposed  undertaking;  a  summary  or  outline  of  a  plan 
or  scheme. 

Protest.  A  notarial  certificate  that  a  promissory  note  or 
bill  of  exchange  has  been  presented  for  acceptance  or  for  pay- 
ment and  that  acceptance  or  payment  has  been  refused. 

On  the  day  of  the  maturity  of  a  note  or  bill  of  exchange  (the 
day  on  which  payment  is  due)  or  the  day  on  which  a  bill  of 
exchange  should  be  presented  for  acceptance  the  notary,  with 
the  instrument  in  his  possession,  must  present  it  at  the  place 
where  it  is  payable  or  where  acceptance  is  to  be  made  and  on 
refusal  or  failure  to  obtain  payment  or  acceptance  he  must 
notify  in  person  or  by  mail  the  indorsers  (in  case  of  a 
bill  of  exchange  that  is  without  indorsement  he  must  notify 
the  drawer).  If  no  place  of  payment  in  the  case  of  a  bill  or 
note  calling  for  payment  is  mentioned  in  the  instrument  it 
must  be  presented  at  the  place  of  business  of  the  payer  (the 


424-  SMITH'S  FINANCIAL  DICTIONARY. 

one  who  is  to  pay  it)  ;  if  there  is  no  such  place  of  business  then 
it  must  be  presented  at  the  payer's  place  of  residence. 

When  a  draft  or  note  is  not  paid  at  maturity  and  it  is  for- 
mally protested  and  so  inscribed  this  step  establishes  a  basis 
of  proceeding  by  law  for  the  collection  of  the  amount  of  it. 
When  an  indorsed  draft  or  note  is  protested  a  demand  for  its 
payment  may  be  made  upon  the  indorser.  The  amount  of  a 
protest  fee  is  added  to  and  becomes  part  of  the  principal.  In- 
terest continues  on  the  whole  until  payment  of  the  note  is  final- 
ly made. 

The  efifect  of  a  protest  is  to  prevent  the  release  of  the  in- 
dorsers  on  an  instrument.  Such  parties  are  discharged  if  the 
instrument  is  not  protested. 

When  a  bill  has  been  noted  the  protest  may  be  extended  as 
of  (back  to)  the  day  of  noting.  The  protest  should  be  com- 
menced on  the  day  on  which  acceptance  or  payment  is  re- 
fused, but  it  may  be  drawn  up  and  completed  at  any  time  be- 
fore the  commencement  of  suit  or  even  before  or  during  trial 
and  be  antedated  accordingly. 

If  a  bank  holds  for  collection  a  check  which  has  been  al- 
lowed to  go  to  protest  and  if  the  drawer  afterwards  makes 
a  sufficient  deposit  to  cover  the  check,  without  specific  in- 
structions, the  bank  may  apply  the  deposit  to  the  payment  of 
the  check.  The  authority  of  the  bank  to  make  the  collection 
continues,  the  maker  of  the  check  has  not  revoked  the  au- 
thority to  pay  contained  in  it,  he  has  made  a  general  deposit 
without  any  instructions  as  to  the  disposition  which  is  to  be 
made  of  it  and  every  element  is  present  which  is  necessary  to 
confer  upon  the  bank  a  right  to  honor  the  check. 

Protest  for  non-acceptance.  Protest  on  refusal  of  the 
drawee  (the  one  drawn  on)  to  accept  a  bill  of  exchange  or 
draft.     For  additional  information  see  Protest. 

Protest  for  non-payment.  Protest  on  refusal  of  the  maker 
of  a  promissory  note  or  the  drawee  of  a  bill  of  exchange  or 
draft  to  pay  it  at  maturity  (when  due).  For  additional  in- 
formation see  Protest. 

Protest   waived.     When   an   indorser   writes   above   his   in- 
dorsement (signature)  "Protest  waived"  the  necessity  of  pro- 
testing the  instrument  to  hold  the  indorser  is  dispensed  with. 
Provisions.     Under  this  head  in  the  country's  exports  come 


SMITH'S  FINANCIAL  DICTIONARY.  425 


beef,  fresh,  salted,  pickled  or  otherwise  cured  or  canned ; 
tallow,  bacon,  hams;  pork,  fresh,  salted,  pickled  or  canned; 
lard,  lard  compounds  and  substitutes  for  lard,  such  as  cot- 
tolene,  lardine,  etc.;  mutton,  oleo  (the  oil),  oleomargarine 
(imitation  butter),  poultry  and  game;  sausage  and  sausage 
meats,  sausage  casings  and  all  other  meat  products;  butter, 
cheese   and  milk. 

Proxy.  A  person  who  is  empowered  to  represent  another 
in  a  given  matter;  the  name  is  also  given  to  the  instrument  by 
which  a  person  is  empowered  so  to  act. 

A  person  who  votes  by  proxy  on  stock  belonging  to  another 
is  said  to  hold  a  proxy  on  the  stock. 

P.  T.     Used  in  the  grain  trade;  signifies  private  terms. 

Public  company.  English  ;  a  term  applied  (in  contradistinc- 
tion to  a  private  company)  to  a  company  to  the  stock  of  which 
the  general  public  is  invited  to  subscribe  . 

Public  credit.  The  reputation  and  ability  of  a  government 
to  pay  its  obligations. 

Public  credit  act.  On  March  18,  1869,  Congress  pledged 
the  faith  of  the  United  States  to  the  payment  of  United  States 
notes  (greenbacks)  in  coin  or  its  equivalent  and  to  make  pro- 
vision at  the  earliest  possible  period  for  their  redemption  in 
coin. 

Public  debt.  Same  as  national  debt ;  the  debt  due  from  a 
nation  to  individual  creditors. 

The  public  debt  of  the  United  States  consists  of  bonds,  Unit- 
ed States  notes  (greenbacks),  old  demand  notes  (notes  issued 
prior  to  the  present  United  States  notes).  National  bank 
notes  for  the  redemption  of  which  money  has  been  deposited 
by  the  issuing  banks,  fractional  currency,  gold  certificates 
and  Treasury  notes  (issued  for  the  purchase  of  silver  bullion). 

Public  depository.  A  bank,  trust  company  or  other  insti- 
tution legally  designated  to  receive  deposits  of  public  funds. 
The  institution  usually  is  required  to  provide  a  bond  or  other 
security  for  the  safe  keeping  and  return  of  the  funds;  some- 
times it  is  required  to  pay  interest  on  these  funds  at  a  rate 
fixed  by  law. 

Public  funds.  An  English  term,  meaning  the  debts  of  the 
British  government. 


426  .SMITH'S  FINANCIAL  DICTIONARY. 

Public  loan.  Money  borrowed  by  a  government  at  a  speci- 
fied rate  of  interest. 

Public  securities.  Securities  issued  by  the  government  and 
by  states,  counties  and  municipalities. 

Public  stock.  A  former  name  for  the  interest-bearing  ob- 
ligations of  the  government  represented  by  certificates;  now 
called  bonds. 

Punitive  damages.  Same  as  exemplary  damages ;  an 
amount  allowed  as  punishment  for  a  malicious  or  aggravated 
injury. 

Punter.  London  Stock  Exchange  name  for  a  constant  spec- 
ulator who  is  satisfied  with  small  profits ;  it  means  the  same 
as  the  term  scalper  on  the  New  York  Stock  Exchange. 

PUR.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  purchasing  receipt. 

Purchase  money.  The  money  paid  or  agreed  to  be  paid  for 
property  bought. 

Put.  A  put  (on  a  stock)  is  a  contract  or  written  agree- 
ment binding  the  issuer  to  receive  from  the  holder  stock 
named  in  the  agreement  within  a  certain  time  at  a  certain 
price  if  the  holder  shall  so  demand,  or  in  other  words,  shall 
elect  to  deliver  (put)  the  stock.  For  example,  A  signs  a 
promise  to  receive  lOO  shares  of  some  specified  stock  from  B 
at  loo  at  any  time  within  60  days  if  B  so  demands.  A  sells 
th's  promise  to  B  for,  say,  $100.  If  within  the  60  days  the 
stock  falls  in  price  so  that  B  can  buy  it  at  a  profit  B  buys  it 
at  the  lower  price  and  calls  on  A  to  receive  the  stock.  The 
stock  must  go  below  99  before  there  is  a  profit  for  B.  If  the 
stock  advances  or  does  not  fall  below  99  B,  of  course,  does 
not  deliver  (put)  it  and  A  makes  $100  on  his  risk.  In  deliver- 
ing the  stock  B  must  give  one  day's  notice,  except  on  the  last 
day,  when  no  notice  is  required. 

If  a  dividend  becomes  due  on  a  stock  during  the  pendency 
of  a  put  on  it  the  dividend  goes  to  the  seller  of  the  put  if  the 
stock  is  put  (delivered)  to  him.  A  dividend  always  goes  with 
the  stock. 

A  put  on  grain  or  any  other  speculative  commodity  is  based 
on  the  same  general  principle  as  in  the  case  of  stocks. 
For  additional  information  see  Privilege. 


SMITH'S  FINANCIAL  DICTIONARY.  4^7 

Put  and  call  broker.  A  broker  who  handles  or  deals  in 
privileges — that  is,  puts,  calls,  spreads  and  straddles. 

Put  of  more.  London  Stock  Exchange  term ;  a  put  of  more 
gives  the  holder  the  right  to  put  (deliver)  to  the  buyer  an  ad- 
ditional amount  of  stock  equal  to  the  amount  named  in  the 
bargain,  or  in  other  words,  to  put  twice  as  much  stock  as  is 
named  in  the  contract.  If  a  man  sells  £1,000  consols,  with  the 
put  of  more,  at  96  1-2  he  can  deliver  £2,000  to  the  buyer.  For 
this  extra  right  or  privilege  the  holder  of  the  put  pays  an  ex- 
tra price. 

Pyramiding.  A  system  of  enlarging  operations  by  use  of 
paper  profits  (profits  in  transactions  not  yet  closed  and  con- 
sequently not  yet  in  hand). 

Illustration :  One  hundred  shares  of  stock  of  the  par  value 
of  100  is  bought  at  10  on  a  margin  of  5  per  cent.  The  stock 
advances  to  15.  There  is  a  profit  of  5  per  cent  which  can  be 
used  as  margin  in  the  purchase  of  100  shares  more.  The  price 
goes  up  to  20.  There  is  then  a  profit  of  5  per  cent  on  the 
second  lot  and  an  additional  profit  of  5  per  cent  on  the  first 
lot,  so  that  there  is  an  unencumbered  profit  of  10  per  cent  on 
100  shares  or  5  per  cent  on  200  shares.  The  profit  is  utilized 
as  margin  for  the  purchase  of  200  shares  more.  The  price  goes 
up  to  25.  Then  there  is  an  unencumbered  profit  of  5  per  cent 
on  the  whole  400  shares  or  20  per  cent  on  100  shares.  This 
profit  is  used  to  buy  400  shares  more. 

Then,  perhaps,  the  price  drops  back  to  20.  There  being 
only  5  per  cent  margin  on  the  whole  800  shares  the  whole  ac- 
cumulated profit  of  $3,500  disappears,  as  well  as  the  margin  of 
5  per  cent  provided  for  the  purchase  of  the  first  100  shares. 
Should  the  price  go  on  up  to  30,  however,  the  profits  would 
be  increased  by  $4,000  which  would  provide  5  per  cent  margin 
for  800  shares  more  of  stock,  making  the  total  amoimt  of  stock 
held  1,600  shares  1,500  of  which  would  have  been  purchased 
with  profits. 

SelHng  stock  at  intervals  on  a  decline,  using  profits  for 
margin,  is  pyramiding,  as  well  as  buying  it  on  profits  on  an 
advance. 

Pyx.  A  receptacle  for  coins  selected  for  trial  as  to  fine- 
ness and  weight  at  a  mint. 


428  SMITH'S  FINANCIAL  DICTIONARY. 


Q 


Quadrangular  operation  in  exchange.  An  operation  in 
which  four  places  are  involved.  For  additional  information 
see  Arbitration  of  exchange. 

Qualified  indorsement.  An  indorsement  without  recourse ; 
see  Without  recourse. 

Quarter.  A  quarter  of  wheat  comprises  eight  bushels  or 
480  pounds. 

Quarter-dollar.  The  silver  coin  weighing  96.45  grains ;  it  is 
.045  inch  thick  and  its  diameter  is  .95  inch. 

Quarter-eagle.  The  name  given  to  the  $2.50  gold  coin  of 
the  United  States ;  weight,  .64.5  grains ;  thickness,  .034  inch ; 
diameter  .75  inch. 

Quarter-stock.  Stock  of  the  par  value  of  $25,  instead  of 
$100. 

Quick  assets.  Property  applicable  to  the  payment  of  debts 
which  is  quickly  convertible  into  cash. 

Quid.     English  colloquialism  for   £1   (one  pound  sterling). 

Quintal.  A  metric  measure  equal  to  220.46  pounds  avoirdu- 
pois. 

Quotation.  As  commonly  used  the  term  quotation  means 
price. 

Stock  quotations  are  in  eighths  of  i  per  cent ;  grain  quota- 
tions and  quotations  for  pork,  lard  and  short  ribs  are  in 
eighths  of  a  cent ;  cotton  quotations  are  in  hundredths  of  a 
cent,  one  hundredth  being  a  point ;  cofifee  quotations  are  in 
hundredths  of  a  cent,  one  hundredth  being  a  point,  but  a  dif- 
ference or  change  in  a  quotation  cannot  be  less  than  five 
hundredths;  silver  bullion  quotations  are  in  eighths  of  a  cent. 

On  the  London  Stock  Exchange  quotations  are  for  the  most 
part  in  pounds  and  fractions  of  a  pound.  Fractions  of  £1 
(one  pound),  rising  by  1-16,  with  their  equivalents,  are: 

9-16  equal  to  11  shillings  3  pence 


I-I6 

equal 

to 

I 

shilling 

3 

pence 

1-8 

« 

(( 

2 

shillings 

6 

3-16 

ti 

« 

3 

(( 

9 

1-4 

tc 

<( 

S 

IS 

0 

5-16 

t( 

(( 

6 

t( 

3 

3-8 

it 

it 

7 

l( 

6 

7-16 

(( 

it 

8 

it 

9 

1-2 

n 

(t 

ID 

<t 

0 

5-8      " 

12 

6      " 

11-16  " 

13 

9      " 

3-4      " 

15 

0      " 

13-16  " 

16 

3       " 

7-8      " 

17 

6      " 

15-16  " 

18 

9      " 

SMITH'S  FINANCIAL  DICTIONARY.  429 

British  consols  are  not  quoted  in  pounds  and  fractions  of 
pounds,  but  by  percentage  the  same  as  stocks  and  bonds  are 
quoted  on  the  New  York  Stock  Exchange. 

On  the  London  Stock  Exchange  the  jobber  (dealer)  when 
asked  for  his  quotations  gives  both  a  buying  and  selling  price. 
If,  for  instance,  he  says  99  7-8 — 100  1-8  he  means  that  he  will 
pay  99  7-8  for  the  stock  or  will  sell  at  100  1-8. 

Also  see  Percentage. 

Quotations  for  exchange.  Same  as  exchange  rates ;  see  Ex- 
change rates. 


R 


R.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  registered,  as  registered  bonds. 

Also,  the  letter  R  when  written  in  a  memorandum  (report) 
of  a  transaction  in  stocks  or  bonds  means  bought  (or  sold)  in 
the  regular  way;  see  Regular  way. 

Also,  the  letter  R  stands  for  rupee,  the  monetary  unit  of 
India. 

Ragged  bond.  A  bond  from  which  coupons  not  yet  due 
have  become  detached.  In  such  a  case  the  coupons  are  pinned 
to  the  bond. 

Rag  money.  A  colloquial  name  for  depreciated  paper 
money.  This  name  was  applied  to  the  United  States  note 
(greenback)  when  it  circulated  at  a  discount  prior  to  the  re- 
sumption of  specie  payments  in  1879. 

Rail.  Abbreviation  used  on  the  London  Stock  Exchange 
for  the  stock  of  a  railroad  company. 

Also  see  Railroad  rail. 

Railbird.     A   name   given    to    a   speculator   who   hung   on 
(stood  outside)   a  rail  that  formerly  encircled  or  partly  en- 
circled  the   board   room    (trading   room)    of   the    New    York 
Stock   Exchange.     Non-members  on  payment  of  an   annual 
subscription  were  allowed  to  enter  the  exchange,  although  re- 


430  SMITH'S  FINANCIAL  DICTIONARY. 

quired  to  remain  outside  of  the  rail.  They  were  officially 
known  as  subscribers.  The  privilege  obtained  by  subscribers 
enabled  them  to  take  quick  advantage  of  changes  in  prices  by 
reason  of  their  being  on  the  scene  and  having  prompt  access 
to  their  brokers. 

Railroad  earnings.  In  compiling  railroad  reports  the  total 
earnings  or  receipts  from  traffic  are  set  down  as  gross  earn- 
ings and  the  remainder,  after  deducting  operating  expenses 
(cost  of  handling  traffic),  is  net  earnings.  To  net  earnings  is 
added  other  income  (usually  derived  from  investments,  which 
are  often  in  the  form  of  securities  held  to  control  other  roads) 
and  the  total  is  gross  income  (as  distinguished  from  gross  earn- 
ings). From  gross  income  are  paid  rentals  and  other  charges, 
interest  requirements  (commonly  called  fixed  charges),  etc. 
The  remainder  is  designated  as  net  income.  From  it  are  paid 
dividends  and  what  is  left  is  surplus. 

In  reporting  gross  earnings  it  is  the  practise  to  divide  each 
month  into  four  weeks.  The  first  seven  days  are  counted  as 
the  first  week,  the  second  seven  days  as  the  second  week  and 
the  third  seven  days  as  the  third  week,  while  the  remaining 
days  of  the  month  are  counted  as  the  fourth  week.  In  a 
month  of  30  days  the  fourth  week  consists  of  nine  days  and 
in  a  month  of  31  days  it  consists  of  ten  days.  Thus,  the 
fourth  week  may  contain  two  Sundays. 

The  custom  is  to  compare  railroad  earnings  in  a  given 
period  with  those  in  the  corresponding  period  in  the 
year  before.  Railroad  traffic  is  light  on  Sunday,  so  that 
when  a  fourth  week  containing  two  Sundays  is  com- 
pared with  a  fourth  week  containing  only  one  Sunday, 
or  vice  versa,  allowance  must  be  made  for  the  difiference  in 
the  number  of  working  days  (week  days).  Likewise,  in  a 
monthly  report  of  earnings  a  month  may  contain  five  Sun- 
days, whereas  the  same  month  in  the  preceeding  year  may 
have  contained  only  four  Sundays,  or  the  reverse. 

A  railroad  as  a  rule  makes  a  weekly  report  of  gross  earn- 
ings ;  it  makes  a  monthly  report  of  gross  and  net  earnings, 
with  deductions  for  charges  of  all  kinds,  so  that  a  monthly 
report  takes  account  of  everything  in  the  month  in  ques- 
tion ;  and  finally  the  road  makes  a  yearly  (annual)  re- 
port which  is  a  consolidation  of  the  twelve  monthly  reports 


SMITH'S  FINANCIAL  DICTIONARY.  431 

with  details  added  and  with  remarks  by  the  president  and 
other  officers. 

Railroad  pass.  A  ticket  or  certificate  which  confers  the 
privilege  of  riding"  free  on  the  railroad  by  which  it  is  issued. 

Railroad  rail.  The  rail  used  on  a  railroad  is  reckoned  by 
weight  at  so  much  per  yard  (3  feet).  Thus,  a  60-pound  rail 
weighs  60  pounds  to  the  yard,  an  80-pound  rail  80  pounds 
to  the  yard,  and  so  on.  The  customary  length  of  a  rail  is  30 
feet. 

Railroad  returns.  Reports  of  railroad  earnings ;  see  Rail- 
road earnings. 

Railroad  traffic.  Passengers  and  freight  (merchandise, 
etc.)  transported  by  a  railroad. 

Raised  check.  A  check  in  which  the  amount  as  originally 
written  has  been  fraudulently  increased. 

A  bank  which  pays  a  raised  check  is  responsible  for  the 
difference  between  the  amount  authorized  to  be  paid  and  the 
amount  actually  paid.  There  are  circumstances,  however,  in 
which  responsibility  may  not  attach  to  the  bank.  A  person 
may  make  out  a  check  for  $25  and  leave  a  space  between  the 
words  "twenty-five"  and  the  word  "dollars"  and  also  leave 
blank  the  space  where  the  amount  is  to  be  written  in  figures. 
Then,  if  "hundred"  is  written  after  the  words  "twenty-five" 
and  "$2,500"  is  written  in  the  space  provided  for  the  amount 
in  figures  so  that  the  check  calls  for  the  payment  of  $2,500 
instead  of  $25  the  bank  escapes  responsibility  for  the  reason 
that  there  was  negligence  in  making  out  the  check. 

Again,  if  a  check  is  made  payable  to  a  person  designated 
by  name,  but  space  is  left  after  the  name  so  that  "or  bearer" 
may  be  written  in  the  bank  is  not  responsible  if  it  makes 
payment  to  a  person  other  than  the  one  intended. 

Rates  for  money.     See  Money  rates. 

Rates  of  exchange.  See  Domestic  exchange  rates ;  also  see 
Foreign  exchange  rates. 

Rating.     Grading  or  classifying. 

The  term  rating  as  applied  to  the  credit  of  an  individual, 
firm  or  corporation  means  an  estimate  of  his  or  its  ability  and 
disposition  to  fulfil  financial  obligations. 

Ratio.     In  coinage  ratio  is  the  term   used  to  express  the 


432 


SMITH'S  FINANCIAL  DICTIONARY. 


equivalent  between  gold  and  silver.  The  ratio  of  i6  to  i,  for 
in.stance,  means  that  i  ounce  of  gold  is  counted  as  worth  i6 
ounces  of  silver. 

In  the  United  States  the  ratio  of  the  silver  dollar  (the 
coin)  to  the  gold  dollar  (the  coin)  is  15.988  (or  nearly  16) 
to  I ;  the  ratio  of  the  subsidiary  silver  coins  (half-dollar,  quar- 
ter-dollar   and  dime)  to  the  gold  dollar  is  14.953  to  i. 

The  actual  or  market  ratio  of  gold  and  silver  is  ascertained 
by  dividing  the  commercial  (market)  price  of  an  ounce  of  fine 
(pure)  silver  into  the  value  of  an  ounce  of  fine  gold,  which  is 
fixed  at  $20.67.2. 

The  coinage  value  in  gold  of  an  ounce  of  fine  silver  is  as  fol- 
lows at  ratios  of  i  to  15  up  to  i  to  40: 


Ratio. 

Value  of 

an  ounce 

of  fine 

silver. 

Ratio. 

Value  of 

an  ounce 

of  fine 

silver. 

Ratio. 

Value  of 

an  ounce 

of  fine 

silver. 

I  to  IS 

I    to    15^ 

I     to     15.988 
U.    S.   ratio 

I   to   16 

I   to   16^ 

I  to  17 

I  to  I7J^ 

I   to  18 

I  to  i8>4.... 

I  to  19 

I  to  19^4 

I  to  20 

I  to  20^ 

I    to    21 

I    to    2iy2 

I    to    22 

I    to  22Y2 

$1.3780 
1.3336 

1.2929 
1.2919 

1.2527 
I.2150 
I.181I 
t.1483 
I.II73 
1.0879 
1.0600 

1.0335 
1.0083 

.9843 
.9614 

.9396 
.9187 

I    to   23 

I   to  23^.... 

I    to   24 

I   to  24J/2 

I    to   25 

I   to  251^ 

I    to   26 

I    to  26^ 

I    to   27 

I  to  27y2 — 

I    to    28 

I  to  28^.... 

I    to    29 

I    to    29>4 

I   to  30 

I    to   301^ 

I    to    31 

I    to  31^ 

$0.8987 
.8796 
.8613 

.8437 
.8268 
.8106 
.7950 
.7800 
.7656 

•7517 
•7382 

•7253 
.7109 
.7007 
.6890 
.6777 

.6668 
.6562 

I    to   32 

I    to    32>1. . 

I   to  32, 

I   to  33^---- 

I  to  34 

I   to  34^ 

I   to  35 

I   to  35^.--- 

I   to  36 

I   to  361/2 

I   to  37 

I   to  37^.--- 

I   to  38 

I   to  38^4.... 

I   to  39 

I  to  39^ 

I   to  40 

$0.6459 
.6360 

.6264 
.6171 
.6080 
.5992 
.5006 
.5823 
.5742 
•.5663 
.5587 
■5512 

•5439 
■5369 
•5300 

•5233 
.5168 

1 

Ratio  of  reserve  to  liabilities.  This  term  is  applied  to  the 
percentage  of  its  deposits  held  in  cash  by  a  bank. 

RE.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  real  estate,  as  real  estate  bonds. 

Reaction.     A  fall  in  prices  after  an  advance. 

Readjustment.  Sometimes  called  simply  adjustment;  a  re- 
adjustment is  when  the  financial  reconstruction  or  rehabilita- 
tion of  a  railroad  or  other  corporation  is  voluntary — that  is, 
by  concurrence  of  the  security  holders.  Reorganization,  as 
distinguished  from  readjustment,  is  when  the  financial  recon- 


SMITH'S  FINANCIAL  DICTIONARY.  433 

stiuction  is  compulsory — that  is,  when  it  is  effected  by  a 
receivership  and  foreclosure. 

In  a  readjustment  (a  financial  reconstruction  that  is  volun- 
tary) bondholders  may  exchange  their  bonds  for  new  bonds 
bearing  a  lower  rate  of  interest  than  the  old  ones,  but  in  such 
a  case  the  loss  in  interest  is  compensated  for  by  the  delivery 
to  the  holders  of  the  bonds  who  make  the  exchange  of  a  bonus 
in  (a  gift  of)  stock  or  in  some  other  security,  such  as  income 
bonds  (income  bonds  receive  interest  only  if  earned).  Or, 
the  bondholders  may  exchange  their  bonds  for  a  smaller 
amount  of  new  bonds,  receiving  stock  or  income  bonds  as 
compensation  for  the  surrender  of  a  portion  of  their  holdings. 

Again,  cumulative  stock  may  be  exchanged  for  a  larger 
amount  of  non-cumulative  stock.  Or,  the  exchange  may  be 
on  even  terms,  with  compensation  for  the  surrender  of  the 
cumulative  right  on  the  stock.  The  compensation  usually 
takes  the  form  of  a  bonus  of  some  kind,  as,  for  instance,  in- 
come bonds. 

Financial  readjustments  without  foreclosure  to  enforce  them 
are  not  numerous. 

Bonds  and  stock  the  holders  of  which  agree  to  accept  the 
teims  of  a  readjustment  plan  are  termed  assenting  bonds 
and  stock ;  bonds  and  stock  the  holders  of  which  do  not  ac- 
cept the  terms  of  a  readjustment  plan  are  termed  non-assent- 
ing or  unassenting  bonds  and  stock. 

Also  see  Reorganization. 

Ready  money.  Money  in  hand ;  money  immediately  avail- 
able. 

Real  damages.     A  legal  term ;  actual  or  express  damages. 

Real  estate  bond.  A  bond  issued  under  a  mortgage  on  real 
estate. 

Realizing.  Selling  or  buying  stocks,  as  the  case  may  be,  in 
order  to  secure  profits  that  have  accumulated. 

Real  money.  Actual  gold  or  silver,  as  the  case  may  be,  in 
which  values  are  measured.  Representative  money  is  the 
promise  to  pay  real  money  on  demand  and  is  used  either  for 
convenience  in  handling  or  to  augment  the  supply. 

Real  stock.  Stock  in  the  hands  of  an  actual  owner.  Sales 
of  real  stock  mean  sales  by  genuine  holders  of  stock  which 


434  SMITH'S  FINANCIAL  DICTIONARY. 

will  be  delivered,  as  opposed  to  short  or  bear  sales  by  specula- 
tors. 

Rebate,  Same  as  drawback.  When  part  of  an  amount 
paid  is  returned  such  return  is  designated  a  rebate. 

A  rebate  on  imported  goods  on  which  duty  has  been  paid 
is  a  repayment,  in  part  or  in  whole,  of  the  duties  on  the  sub- 
sequent exportation  of  the  same  goods  in  their  original  or  in 
another  form. 

A  rebate  on  freight  rates  is  a  repayment,  in  part,  of  the 
rales  (or  charges). 

Rebate  rate.  The  name  given  to  the  rate  of  drawback  or 
allowance  for  the  payment  before  maturity  (before  due)  of  a 
time  bill  of  exchange.  A  deduction  is  made  from  the  amount 
of  the  bill  equal  to  interest  at  an  agreed  rate  for  the  unexpired 
time  which  the  bill  has  to  run. 

Receipt.  An  acknowledgment  of  the  payment  of  money 
or  discharge  of  an  obligation  or  an  acknowledgment  of 
the  possession  of  something. 

A  receipt  for  money  is  not  always  conclusive.  A  receipt  is 
held  to  be  true  until  shown  to  be  false.  The  one  who  alleges 
its  falsity  must  prove  his  allegation.  When  proved  to  be  in- 
correct or  false  a  receipt  ceases  to  be  binding.  A  check  de- 
livered and  paid  is  the  best  kind  of  evidence  of  the  payment  of 
an  obligation. 

It  is  a  common  practise  of  express  companies  to  issue  re- 
ceipts relieving  them  of  liability  beyond  $50  for  loss  unless 
the  value  of  the  package  is  given  at  the  time  of  shipment. 
This  has  been  held  to  be  a  reasonable  condition  on  the  ground 
that  the  express  company  in  accepting  goods  of  greater  value 
than  $50  is  entitled  to  be  informed  of  the  full  value  if  it  is  to 
be  held  responsible  therefor  in  order  that  it  may  charge 
more  for  its  service  and  take  better  care  of  the  goods.  When 
a  receipt  containing  a  limitation  of  liability  is  accepted  by  the 
shipper  he  is  assumed  to  have  assented  to  the  condition  and 
he  is  accordingly  bound  by  it. 

Receiver.  A  person  appointed  by  the  court  to  take  into  his 
custody,  control  and  management  the  property  or  funds  of  an- 
other (or  of  a  corporation)  pending  judicial  action  concern- 
ing them.     He  is  an  officer  of  the  court,  represents  it  and  is 


SMITH'S  FINANCIAL  DICTIONARY.  435 


amenable  to  its  orders  as  to  the  property  and  any  interference 
with  his  autliority  is  contempt  of  court. 

Receiver's  certificate.  A  certificate  issued  by  a  receiver  for 
the  purpose  of  raising  money  for  a  corporation  that  is  within 
the  jurisdiction  of  a  court.  Such  a  certificate  constitutes  a 
first  lien  upon  the  net  earnings  and  property  of  the  corpora- 
tion. 

Receivership.     The  office  and  functions  of  a  receiver. 

Receive  ticket.  l\  memorandum  ticket  given  by  the  buyer 
of  stocks  or  bonds  in  confirmation  of  the  transaction  pre- 
vious to  the  delivery  of  the  securities.  This  operation  is  called 
comparison  ;  see  Comparison. 

Receiving  house.  Trade  name  for  a  concern  whose  busi- 
ness is  the  receiving  and  selling  of  cash  grain  (cash  grain 
being  the  actual  cereal  and  not  the  contracts  entered  into  in 
speculative  operations). 

Receiving  teller.  The  clerk  in  a  bank  who  receives  de- 
posits ;  often  called  second  teller. 

Reclamation.  A  demand  for  the  substitution  of  a  security 
that  is  a  delivery  when  a  security  that  is  not  a  delivery  has 
been  delivered.     For  information  see  Rules  for  delivery. 

When  a  bank  for  some  reason  rejects  a  check  or  draft  re- 
ceived through  the  clearing  house  it  makes  reclamation  for 
the  amount  on  the  bank  which  sent  it  to  the  clearing  house. 

Recoinage.  The  melting  of  worn  (abraded)  coins  and  the 
recoinage  of  them.  An  appropriation  is  annually  made  by 
Congress  to  cover  the  loss  on  the  recoinage  of  worn  pieces. 

Reconstruction.  The  English  term  for  reorganization  ;  see 
Reorganization. 

Recovery.     A  rally  in  prices  after  a  decline. 

Redback.  A  name  given  to  a  non-interest-bearing  treasury 
note  of  the  former  Republic  of  Texas,  issued  in  1838.  The 
name  was  derived  from  the  fact  that  the  back  of  the  note  was 
printed  in  red. 

Red  dog  money.  In  the  early  part  of  the  last  century 
(prior  to  the  formation  of  the  State  Bank  of  Indiana  in  1834) 
the  state  of  Indiana  issued  circulating  notes  (money)  in  de- 
nominations of  $5,  $10  and  $20.  They  were  receivable  for 
taxes  and  bore  interest.  They  depreciated  in  value  to  60 
cents  on   the  dollar  and   the  opprobrious  name   of  "red   dog 


436  SMITH'S  FINANCIAL  DICTIONARY. 

money"  was  applied  to  them.  They  were  all  finally  redeemed 
at  their  full  value. 

The  term  "red  dog  money"  (or  yellow  dog  money)  came 
into  general  use  in  describing  depreciated  notes  issued  by 
other  states  and  by  banks  in  other  states  than  Indiana.  The 
term  was  practically  synonymous  with  "wildcat  money;"  see 
Wildcat  money. 

Redeemable  bond.  One  which  may  be  redeemed  (paid)  at 
some  specified  future  time,  after  which  interest  on  it  ceases. 
The  English  name  is  redeemable  stock. 

Redemption.  The  payment  of  a  debt,  as  the  redemption 
(payment)  of  bonds  or  the  redemption  by  a  bank  of  its  notes. 

Redemption  agent.  The  name  given  to  a  bank  which  is  a 
member  of  the  clearing  house  and  which  clears  for  another 
bank  which  is  not  a  member;  also  called  clearing  house 
agent.  A  bank  which  is  a  clearing  house  member  can  act  for 
a  bank  which  is  not  a  member  only  by  consent  of  the  clearing 
house  committee. 

Formerly  a  national  bank  not  located  in  a  reserve  city 
might,  in  addition  to  redeeming  its  own  notes  at  its  place  of 
business,  designate  another  national  bank  in  any  of  the  re- 
serve cities  specified  in  the  National  bank  act  as  an  agent  for 
the  redemption  of  its  notes.  The  act  of  June  20,  1874, 
abolished  the  provision  for  redemption  agents  and  compelled 
national  banks  to  keep  in  the  Treasury  for  the  redemption  of 
their  notes  an  amount  of  lawful  money  equal  to  5  per  cent  of 
their  notes  outstanding.  They  were  allowed  to  count  this  5 
per  cent  in  their  reserves  held  against  deposits.  The  Treas- 
ury thus  became  the  redemption  agent  of  the  national  banks, 
but  they  were  not  relieved  of  the  obligation  of  redeeming  their 
own  notes  on  demand. 

Redemption  cities.  Reserve  cities,  the  national  banks  in 
which  were  formerly  permitted  to  act  as  agents  for  the  re- 
demption of  notes  issued  by  national  banks  not  located  in  re- 
serve cities.  The  act  of  June  20,  1874,  abolished  this  pro- 
vision. Notes  of  national  banks  are  now  redeemed  by  the 
banks  issuing  them    or  by  the  Treasury. 

Redemption  drawing.  A  drawing  for  the  redemption  (pay- 
ment) of  bonds,  the  terms  under  which  they  were  issued  per- 
mitting redemption  in  such  manner.    A  drawing  usually  takes 


SMITH'S  FINANCIAL  DICTIONARY.  437 

plr-ce  at  stated  intervals  and  the  bonds  bearing  the  numbers 
drawn  are  redeemed. 

Redemption  fund.  The  gold  standard  act  of  March  14, 
1900,  provided  that  a  fund  of  $150,000,000  in  gold  should  be  set 
aside  and  maintained  for  the  redemption  of  United  States 
notes  (greenbacks)  and  Treasury  notes  (notes  issued  under 
the  Sherman  act  for  the  purchase  of  silver  bullion).  United 
States  notes  so  redeemed  may  be  reissued  for  gold. 

Also,  a  redemption  fund  is  a  fund  established  for  the  re- 
demption of  a  private  debt  (as  the  bonded  debt  of  a  corpora- 
tion) as  well  as  a  public  debt. 

Rediscount.  The  resale  of  a  promissory  note  or  bill  of  ex- 
change (draft).  For  instance,  when  a  note  has  been  sold  and 
the  buyer  sells  it  again  it  is  rediscounted. 

Red  list.  A  list  (longer  than  the  blue  list)  of  practically 
all  the  stocks  actively  dealt  in  on  the  New  York  Stock  Ex- 
change printed  on  red  paper  daily.  The  high,  low  and  last 
prices  are  given,  together  with  the  number  of  shares  of  each 
stock  dealt  in. 

Re-draft.  This  is  a  draft  on  the  drawer  of  a  bill  of  ex- 
change for  the  amount  of  it  and  the  protest  fee  and  other 
charges  when  the  draft  has  been  dishonored  by  the  drawee 
(the  one  who  was  to  have  paid  it). 

Re-exchange.  When  a  bill  of  exchange  is  dishonored  by 
the  drawee  (the  one  upon  whom  it  is  drawn)  and  is  paid  by 
another  party  for  the  honor  of  (for  the  account  of)  the 
drawer  the  party  paying  it-  draws  for  the  amount  of  it,  to- 
gether with  the  protest  fee  and  other  charges,  upon  the 
drawer.    This  operation  is  called  re-exchange. 

Re-exports.  Raw  material  imported  and  then  exported  as 
finished  articles. 

Refunding.     To  fund  anew ;  to  replace  by  a  new  loan. 

Refunding  acts.  The  first  general  refunding  act  was  ap- 
proved July  14,  1870,  and  the  second  was  approved  January 
20,  1871.  Under  these  acts  about  $1,400,000,000  bonds  were 
issued  of  which  §500,000,000  were  5  per  cent  ten-year  bonds, 
redeemable  May  i,  1881  ;  $185,000,000  were  4  1-2  per  cent 
fifteen-year  bonds,  redeemable  September  i,  1891,  and  the  re- 
mainder were  4  per  cent  thirty-year  bonds,  redeemable  July 
I,  1902. 


438  SMITH'S  FINANCIAL  DICTIONARY. 

The  gold  standard  act  of  March  14,  1900,  provided  for  the 
redemption  into  2  per  cent  thirty-year  bonds  of  the  5  per 
cent  bonds  payable  February  i,  1904,  the  4  per  cent  bonds 
payable  July  i,  1907,  and  the  3  per  cent  bonds  payable  August 
I,  1908. 

Registered  bond.  A  registered  bond  is  one  registered  in 
the  name  of  the  owner  and  the  bond  itself  bears  his  name.  Such 
a  bond  is  transferable  the  same  as  a  stock  certificate.  The 
bond  itself  contains  a  form  for  assignment  and  transfer. 
When  a  registered  bond  Is  transferred  a  new  bond  is  issued 
for  the  old  one  just  as  when  a  stock  certificate  is  transferred  a 
new  certificate  is  issued  for  the  old  one. 

The  interest  on  a  registered  bond  is  paid  by  check,  which  is 
sent  by  mail  to  the  postoffice  address  of  the  owner  of  the 
bond.  Due  notice  of  change  of  address  should,  therefore,  be 
given.  The  old  address  should  be  given  as  well  as  the  new 
one. 

There  are  some  registered  coupon  bonds,  but  such  issues 
are  not  numerous. 

Registered  coupon  bond.  A  bond  the  principal  of  which 
is  payable  only  to  the  one  whose  name  is  inscribed  on  it  and 
in  whose  name  also  the  bond  is  registered  (entered  on  the 
books  of  the  company  issuing  it),  while  the  coupons  calling 
for  the  payment  of  the  interest  as  it  becomes  due  are  payable 
to  bearer. 

Registered  letter  or  registered  mail  matter.  When  a  letter 
or  parcel  sent  by  mail  is  registered  the  postmaster  of  the  post- 
office  where  it  is  received  makes  a  formal  record  of  it  and  fur- 
nishes a  receipt  for  it  to  the  sender  and  returns  to  the  sender 
an  acknowledgment  in  writing  by  the  one  to  whom  it  was 
sent  of  its  delivery  to  him.  Special  care  is  taken  in  the  trans- 
mission of  the  letter  or  parcel,  but  the  government  will  not 
make  restitution  in  case  of  loss. 

Registered  stock.  In  Great  Britain  registered  stock  is 
stock  registered  in  the  name  of  the  owner  in  the  books  of  the 
company  issuing  it,  although  the  owner  receives  a  certificate 
of  stock  as  well.  This  certificate,  however,  is  not  a  negotiable 
instrument;  the  possession  of  it  does  not  carry  with  it  the 
ownership  of  the  stock.     Before  the  stock  can  be  transferred 


SMITH'S  FINANCIAL  DICTIONARY.  439 


to  another  the  signature  of  the  owner  (or  of  his  attorney)  is 
again  required ;  the  certificate  must  also  be  surrendered. 

Registrar.  A  bank  or  trust  company  appointed  by  a  com- 
pany to  keep  a  record  of  its  stock  and  to  certify  that  the  name 
on  the  certificate  is  that  of  the  owner  of  record. 

A  registrar  acts  as  a  check  on  the  transfer  agent  (or  trans- 
fer office)  and  certifies  when  new  certificates  are  issued  that 
the  old  ones  have  been  canceled.  Thus,  there  can  be  no  over- 
issue or  duplication  of  stock. 

Regret.     See  Allotment  and  regret. 

Regular  lot.  In  transactions  on  the  New  York  Stock  Ex- 
change a  regular  lot  is  100  shares  of  stock  or  $10,000  of 
bonds ;  the  rules  of  the  exchange  provide  that  an  offer  to  buy 
or  sell  shall  be  accompanied  with  a  specific  number  of  shares 
or  amount  (face  value)  of  bonds,  but  when  no  number  or 
amount  is  named  it  shall  be  considered  to  be  for  100  shares  of 
stock  or  $10,000  (face  value)  of  bonds. 

Regular  lots  of  commodities  are:  Grain,  5,000  bushels; 
lard,  250  tierces  (85,000  pounds)  ;•  pork,  250  barrels;  short 
ribs,  50,000  pounds ;  cotton,  100  bales  (50,000  pounds)  ;  coffee, 
250  bags,  (32,500  pounds)  ;  silver  bullion  1,000  ounces. 

On  the  London  Stock  Exchange  an  order  to  buy  (or  sell) 
I  means  to  buy  (or  sell)  stock  of  the  total  par  or  face  value  of 
£1,000.    Accordingly,  1-2  means  £500  and  5  means  £5,000. 

Regular  notice.  Speculation  in  commodities  (grain,  cotton, 
coffee  etc.)  is  in  certificates  (warehouse  receipts  which  call 
for  the  actual  property).  On  a  future  contract  (a  contract 
calling  for  the  delivery  of  the  commodity  in  a  specified  future 
month)  which  is  at  seller's  option  a  certain  number  (according 
to  the  rules  of  an  exchange)  of  days'  notice  must  be  given  by 
the  seller  to  the  buyer  of  an  intention  to  deliver  the  commodity 
(that  is,  the  certificate  representing  it)  and  collect  payment 
for  it.  When  the  contract  is  at  buyer's  option  a  certain  number 
of  days'  notice  to  make  delivery  must  be  given  by  the  buyer  to 
the  seller.  This  notice  is  called  a  regular  notice.  There  also 
is  a  short  notice ;  see  Short  notice. 

Regular  way.  The  term  employed  on  the  New  York  Stock 
Exchange  to  designate  a  transaction  when  delivery  of  the 
stock  (or  bonds)  is  to  be  made  on  the  following  day  before  or 
at  2.15  o'clock. 


440  SMITH'S  FINANCIAL  DICTIONARY. 

Rehabilitation.  See  Readjustment;  also  see  Reorganiza- 
tion. 

Rehypothecation.  The  hypothecation  again  of  collateral 
already  hypothecated.  Rehypothecation,  except  by  consent  of 
the  owner  of  the  collateral,  is  illegal. 

When  a  customer  deposits  with  a  broker  securities  instead 
of  money  as  margin  he  hypothecates  the  securities  with  the 
broker.  In  effect  he  obtains  a  loan  on  them.  The  margin  rep- 
resents the  loan.  He  signs  an  agreement  with  the  broker 
whereby  the  broker  is  permitted  to  rehypothecate  the  securi- 
ties— is  permitted  to  use  them  as  collateral  in  obtaining  a  loan 
for  himself.  If  the  broker  defaults  on  the  loan  he  has  ob- 
tained on  the  securities  and  the  securities  are  sold  to  satisfy 
the  loan  the  owner  of  the  securities  (the  broker's  customer) 
cannot  recover  the  securities.  He  is  without  recourse  except 
that  he  may  proceed  against  the  broker  to  recover  the  differ- 
ence between  the  value  of  the  securities  and  what  he  may  owe 
the  broker  in  margin  or  otherwise. 

Also,  when  stocks  (or  bonds)  are  bought  on  margin  the 
broker's  customer  gives  the  broker  the  right  to  hypothecate 
them.  This  is  necessary  as  the  customer  is  the  real  owner  of 
the  securities — they  are  bought  for  his  account  and  risk. 

Reichsbank.  The  name  commonly  used  in  referring  to  the 
Imperial  Bank  of  Germany,  which  is  the  imperial  bank  or 
bank  which  receives  holds  and  disburses  the  funds  of  the  state 
(government).    Translated  Reichsbank  is  Imperial  Bank. 

Reichsmark,  An  old  name  for  mark;  translated  reichs- 
mark  is  imperial  mark.  Exchange  on  Germany  is  still  quoted 
in  reichsmarks. 

Reimbursement  credit.  This  is  a  form  of  credit  that  figures 
in  dealings  in  both  domestic  and  foreign  exchange. 

If  a  seller  of  goods  in  Boston  to  a  buyer  in  Chicago  desires 
to  receive  his  pay  for  them  in  New  York  the  buyer  in  Chicago 
establishes  a  credit  in  New  York  which  the  seller  in  Boston 
may  draw  against.  Subsequently  the  one  with  whom  the 
credit  is  established  in  New  York  draws  upon  the  buyer  in 
Chicago  or  else  the  buyer  in  Chicago  makes  a  remittance  for 
the  amount  which  the  Boston  seller  draws  for.  If  a  seller  of 
goods  in  China  to  a  buyer  in  New  York  desires  to  receive  his 


SMITH'S  FINANCIAL  DICTIONARY.  441 

pay  in  London  the  process  is  the  same  as  in  the  case  of  the 
seller  in  Boston  to  the  buyer  in  Chicago. 

Reinvestment.  The  using  of  interest  and  dividends  to 
make  new  purchases  of  securities. 

Reissuable  notfes.  Money  in  the  form  of  notes  which  after 
being  paid  may  again  be  put  in  circulation.  United  States 
notes  (greenbacks)  and  national  bank  notes  are  the  only  re- 
issuable notes. 

Released  indorsed  bond.  Any  indorsement  on  a  coupon 
bond  stating  that  it  has  been  deposited  as  security  for  bank 
circulation  (bank  notes)  or  for  insurance  requirement  may 
be  released  by  an  acknowledgment  of  the  release  before  a  no- 
tary public ;  it  will  then  be  a  delivery  in  accordance  with  New 
York  Stock  Exchange  rules  as  a  released  indorsed  bond. 

Sometimes  the  owner  of  a  coupon  bond  inscribes  the  fact  of 
his  ownership  on  the  bond,  as,  for  instance,  "This  bond  is  the 
property  of  John  Jones."  In  such  a  case  in  making  a  change 
in  the  ownership  of  the  bond  a  formal  assignment  of  it  in  blank 
must  be  executed  by  the  owner  and  it  then  may  be  sold  under 
the  New  York  Stock  Exchange  rules  specifically  as  a  released 
indorsed  bond. 

Remargining.  In  a  speculative  transaction  this  term  means 
replenishing  margin  which  has  been  partly  or  wholly  ex- 
hausted by  an  adverse  movement  in  prices. 

Remargining  a  loan.  Same  as  replenishing  a  loan ;  provid- 
ing additional  collateral.  For  additional  information  see  Col- 
lateral loan. 

Remittance.  Money  (or  its  representative,  as  a  bill  of  ex- 
change or  draft  or  other  order  for  money)  forwarded  from  one 
place  to  another  is  a  remittance ;  also,  the  act  of  forwarding  it 
is  remittance. 

Remitter.  The  person  who  forwards  a  bill  of  exchange 
(draft)  or  other  order  for  money  to  a  person  in  another  place. 

Remonetize.     To  reinstate  as  lawful  money. 

Renewal.  When  a  loan  of  money  becomes  due  and  it  is  con- 
tinued for  another  period  that  is  a  renewal  of  the  loan.  When 
a  stock  that  has  been  borrowed  is  called  (its  return  demanded) 
and  it  is  re-borrowed  from  the  same  or  from  another  lender  that 
is  a  renewal  of  a  stock  loan. 


44^  SMITH'S  FINANCIAL  DICTIONARY. 

Rentes.  The  government  bonds  of  France.  The  bonds  of 
some  other  European  governments  also  bear  the  same  name. 

Renunciation  form.  English  name  for  the  form  (blank) 
signed  by  a  shareholder  (stockholder)  when  he  transfers 
(sells)  liis  right  to  participate  in  a  privilege  accorded  by  a 
company,  as.  for  instance,  the  right  to  subscribe  for  new  stock 
to  be  issued  by  the  company. 

Renunciation  of  right.  London  Stock  Exchange  term  for 
the  transfer  (sale)  of  a  right  accorded  to  a  shareholder  (stock- 
holder) in  a  company,  as,  for  instance,  the  right  to  subscribe 
for  new  stock  to  be  issued  by  the  company. 

Reorganization,  When  the  financial  reconstruction  or  re- 
habilitation of  a  railroad  or  other  corporation  is  voluntary — 
that  is,  by  concurrence  of  the  security-holders — the  term  re- 
adjustment applies.  When  the  financial  reconstruction  is  com- 
pulsory— that  is,  when  it  is  effected  by  a  receivership  and  fore- 
closure— the  term  reorganization  applies.  Most  reconstruc- 
tions are  compulsory;  they  seldom  can  be  effected  except  by 
legal  process  following  insolvency. 

The  method  of  reorganization  is  ordinarily  as  follows: 
After  default  has  been  made  in  interest  on  bonds,  say  the  first 
mortgage  bonds,  a  receiver  is  appointed,  after  which  a  plan  of 
reorganization  is  formulated.  Provision  usually  is  made  in  the 
plan  whereby  the  first  mortgage  bonds,  together  with  the  ac- 
cumulated unpaid  interest,  are  to  be  paid  in  full.  Such  holders 
as  may  desire  to  do  so  take  for  their  bonds  bonds  of  a  newly 
formed  company,  with  perhaps  stock  for  the  unpaid  interest. 
Such  holders  as  prefer  cash  for  their  bonds  and  unpaid  interest 
are  paid  in  cash.  It  sometimes  is  the  case  that  the  holders  of 
bonds  who  take  bonds  of  the  new  company  for  their  old  bonds 
receive  the  unpaid  interest  in  cash. 

The  money  to  pay  those  bondholders  who  prefer  cash  (and 
to  pay  unpaid  interest  if  it  is  to  be  paid  in  cash)  and  to  provide 
other  needed  funds  and  working  capital  is  raised  by  levying 
an  assessment  on  the  stock  (on  the  holders  of  the  stock  at  so 
much  per  share).  Then,  an  order  for  a  sale  of  the  property 
under  foreclosure  is  obtained  from  the  court  (the  property  be- 
ing under  the  control  of  the  court  after  the  appointment  by 
it  of  a  receiver). 

The  sale  wipes  out  the  bonds  and  the  stock.     The  proceeds 


SA'IirH'S  FINANCIAL  DICriONAKV. 443 

of  the  sale,  however,  must  go  toward  the  liquidation  of  the 
mortgage  debt.  The  property  (generally)  is  bid  in  by  a  com- 
mittee of  the  bondholders  for  the  benefit  of  the  bondholders. 
The  reorganization  plan  (generally)  is  primarily  in  the  interest 
of  the  bondholders  and  only  secondarily  in  the  interest  of  the 
stockholders. 

After  the  formulation  of  the  reorganization  plan  and  pre- 
vious to  the  sale  of  the  property  an  underwriting  syndicate  is 
formed  which  agrees  to  take,  pay  for  and  make  exchange 
of  the  bonds  the  holders  of  which  prefer  cash  and  to  pay  the 
assessment  on  stock  the  holders  of  which  decline  to  pay  the 
assessment.  The  syndicate  receives  new  stock  for  the  old 
stock  on  which  it  pays  the  assessment,  which  old  stock  the 
holders  who  do  not  pay  the  assessment  lose  entirely  by  reason 
of  its  being  wiped  out  by  the  sale  under  foreclosure.  The 
syndicate  (generally)  receives  a  commission  (in  new  securities 
or  cash  or  both)  on  the  whole  issue  of  new  bonds  and  the 
whole  issue  of  new  stock  for  guaranteeing  the  reorganization 
plan — for  agreeing  to  pay  for  and  exchange  for  new  bonds 
such  old  bonds  as  are  not  exchanged  by  the  holders  and  for 
guaranteeing  to  pay  the  assessment  on  stock  the  holders  of 
which  decline  to  pay  it.  As  a  rule  an  underwriting  syndicate 
has  to  pay  for  few  bonds,  the  holders  preferring  to  exchange, 
or  in  other  words,  convert  them  into  new  bonds;  likewise, 
the  syndicate  as  a  rule  has  to  pay  the  assessment  on  no 
large  proportion  of  the  stock,  the  holders,  for  the  most  part, 
preferring  to  pay  it.  New  securities  (either  bonds  or  stock) 
are  customarily  given  for  the  assessment  on  the  stock  (as  a 
compensation  for  the  assessment  money  paid). 

Sometimes  there  is  an  assessment  on  the  bonds,  as  when  the 
propert}'  is  not  worth  the  amount  of  the  bonds  ;  sometimes, 
also,  new  bonds  for  a  less  amount  are  given  in  exchange  for 
the  old  bonds ;  and  usually  the  interest  on  the  new  bonds  is  at 
a  lower  rate  than  the  interest  on  the  old  bonds.  Second  mort- 
gage bonds  or  other  bonds  subsequent  in  lien  to  the  first 
mortgage  bonds  are  usually  subjected  to  assessment ;  new 
securities  are  almost  invariably  given  as  compensation  for  the 
assessment. 

Also  see  Readjustment. 

Replenishing  a  loan.     Same  as  remargining  a  loan ;  provid- 


444  SMITH'S  FINANCIAL  DICTIONARY. 

ing  additional  collateral.  For  additional  information  see  Col- 
lateral loan. 

Replevin.  Replevin  is  a  provisional  remedy  by  which  prop- 
erty claimed  is  taken,  pending-  decision  as  to  its  ownership, 
into  the  custody  of  the  law  in  order  to  prevent  its  being  dis- 
posed of  or  secreted  by  the  defendant.  The  plaintiff  is  re- 
quired to  give  a  bond  to  indemnify  the  defendant  for  any  loss 
or  damage  sustained  in  case  possession  of  the  property  is 
awarded  to  the  defendant. 

Report.  The  name  is  given  to  a  memorandum  furnished  by 
a  broker  to  his  customer  containing  information  that  the  cus- 
tomer's order  has  been  executed,  with  details  as  to  price,  etc. 

On  the  Paris  Bourse  the  word  report  means  the  same  as 
contango  in  London  or  the  same  as  interest  or  carrying  charge 
in  New  York. 

Representative  money.  Representative  money  is  anything 
promising  to  pay  money  which  circulates  as  a  medium  of  ex- 
change. It  is  usually  made  of  paper,  but  sometimes  of  a  cheap 
metal.  In  the  case  of  paper  money  the  promise  to  pay  is 
printed  on  it ;  in  the  case  of  metal  money  the  promise  to  pay 
is  expressed  in  the  laws. 

Repudiation.  The  rejection,  in  whole  or  in  part,  of  a  con- 
tract, debt  or  obligation.  The  term  applies  in  particular  to 
the  rejection  or  mandatory  scaling  of  its  debt  by  a  govern- 
ment. 

The  word  repudiation  as  applied  to  the  rejection  of  a  debt 
by  a  state  was  first  used  in  1841  when  the  state  of  Mississippi 
repudiated  bonds  issued  to  railroad  companies  which  failed  to 
comply  with  conditions  on  which  they  received  them. 

Requirements  for  listing.  A  circular  furnished  by  the  New 
York  Stock  Exchange  containing  the  requirements  that  must 
be  complied  with  to  gain  for  an  issue  of  stock  or  bonds  ad- 
mission to  dealings  at  the  exchange.  For  additional  informa- 
tion see  Admission  to  dealings  at  the  New  York  Stock  Ex- 
change. 

Reserve.     See  Bank  reserve. 

Reserve  agent.  A  national  bank  in  which  another  national 
bank  keeps  part  of  its  legal  reserve ;  the  first  bank  is  the  re- 
serve agent  of  the  second  bank.  For  additional  information 
see  Bank  reserve. 


SMITH'S  FINANCIAL  DICTIONARY.  445 

Reserve  cities.  The  places  in  which  national  banks  are  situ- 
ated are  divided  into  three  classes — places  that  are  not  reserve 
cities,  reserve  cities  and  central  reserve  cities.  Places  that  are 
not  reserve  cities  comprise  the  greater  number  of  places,  na- 
tional banks  in  which  are  required  to  maintain  a  reserve  of 
(keep  on  hand)  15  per  cent  of  the  amount  on  deposit  with 
them,  three-fifths  of  which  reserve,  however,  may  be  de- 
posited by  them  with  banks  in  reserve  or  central  reserve  cities. 
Reserve  cities  are  places  of  more  importance,  at  least  as  finan- 
cial centres,  than  the  places  which  are  not  reserve  cities.  Na- 
tional banks  in  reserve  cities  must  maintain  a  reserve  of  25 
per  cent  of  their  deposits,  one-half  of  which  may  be  deposited 
in  banks  in  central  reserve  cities.  Central  reserve  cities  are  the 
chief  financial  centres,  of  which  New  York  is  foremost.  Na- 
tional banks  in  reserve  cities  must  maintain  a  reserve  of  25 
cent  in  their  own  vaults. 

Reserve  cities  are  Albany,  Baltimore,  Boston,  Brooklyn, 
Cincinnati,  Cleveland,  Columbus,  Denver,  Des  Moines,  De- 
troit, Houston,  Indianapolis,  Kansas  City,  Kan.,  Kansas  City, 
Mo.,  Lincoln,  Los  Angeles,  Louisville,  Milwaukee,  Minne- 
apolis, New  Orleans,  Omaha,  Philadelphia,  Pittsburg,  Port- 
land, Ore.,  St.  Joseph,  St.  Paul,  San  Francisco,  Savannah, 
Washington. 

Central  reserve  cities  are  Chicago,  New  York,  St.  Louis. 

Banks  in  places  which  are  not  reserve  cities  are  unofficially 
designated  as  country  banks. 

Reserve  liability  on  bank  shares.  Practically  all  banks  in 
Great  Britain  have  a  large  amount  of  capital  only  callable — 
that  is,  subject  to  demand  upon  the  holders  of  shares  (of  stock) 
— in  case  of  disaster.  The  purpose  of  the  reserve  liability  is 
to  afiford  security  to  depositors. 

Resources.  The  aggregate  of  available  property;  the  op- 
posite of  liabilities.  In  business  resources  include  cash  on 
hand,  merchandise,  bills  receivable,  etc. 

Respondentia.  A  loan  of  money  on  the  cargo  of  a  vessel 
which  the  borrower  undertakes  to  repay  with  interest,  pro- 
vided the  cargo  arrives  in  safety  at  the  port  of  destination ; 
the  contract  or  instrument  for  borrowing  on  a  vessel's  cargo 
is  likewise  called  respondentia. 

Rest.     See  Bank  of  England  rest. 


446  SMITH'S  FINANCIAL  DICTIONARY. 

Restrictive  indorsement.  An  indorsement  so  worded  as  to 
restrict  the  further  negotiability  of  the  instrument.  The  words 
"For  collection"  written  on  a  promissory  note  render  the  in- 
strument restrictive.  The  indorser  in  such  a  case  may  hold 
that  he  is  not  the  owner  of  the  note  and  did  not  mean  to  give 
title  to  it  or  to  its  proceeds  when  collected;  such  an  indorse- 
ment merely  makes  the  indorsee  agent  for  the  indorser  in 
collecting  the  note. 

Resumption  act  of  1875.  A  bill  enacted  into  law  January 
7,  1875,  which  provided  for  the  resumption  of  specie  payments 
by  the  government  on  January  i,  1879. 

When  the  day  appointed  for  resumption  arrived  the  Treas- 
ury held  more  than  $114,000,000  in  gold  in  excess  of  outstand- 
ing gold  certificates  and  the  premium  on  gold  in  the  market 
had  disappeared.  In  fact  greenbacks  (paper  money)  were  at 
par  on  December  17,  1878.  The  Gold  Room  in  New  York, 
where  speculative  operations  in  gold  had  been  carried  on, 
closed  the  following  day  and  never  reopened.  No  gold  was 
withdrawn  from  the  Treasury  on  resumption  and  only  $11,- 
000,000  was  withdraAvn  during  the  year. 

Resumption  of  specie   payments.     See   Resumption   act   of 

1875- 

Retail.  Goods  sold  at  retail  are  goods  sold  in  small  quan- 
tity. 

Return.  The  term  return  is  used  as  a  synonym  for  report, 
as,  for  instance,  the  return  of  earnings  of  a  railroad  or  in- 
dustrial company. 

The  term  return  is  also  used  as  a  synonym  for  statement, 
as  the  return  (statement)  of  the  financial  condition  of  a  bank 
or  other  corporation. 

The  term  return  is  also  used  to  signify  the  yield  of  securities 
(stocks  and  bonds)  in  dividends  or  interest.  See  Income 
basis. 

The  term  return  as  used  at  the  Banker's  Clearing  House  in 
London  means  an  article  (check,  or  draft  or  other  paper  call- 
ing for  payment)  which  the  bank  to  which  it  was  presented 
for  payment  returned  because  there  were  not  funds  to  meet  it 
or  because  it  was  not  properly  indorsed  or  for  some  other 
reason. 

Also  see  Bank  of  England  return. 


SMITH'S  FINANCIAL  DICTIONARY.  447 

Revenue  account.  Same  as  income  account ;  see  Income  ac- 
count. 

Ribs.     See  Short  ribs. 

Rig.  On  the  London  Stock  Exchange  there  is  said  to  be  a 
rig  in  a  stock  when  a  set  of  speculators  have  combined  to  buy 
up  the  available  supply  so  as  to  make  the  stock  scarce  with 
the  purpose  of  effecting  a  rise  in  the  price  of  it.  The  corre- 
sponding term  on  the  New  York  Stock  Exchange  is  corner; 
see  Corner. 

Rigging  the  market.  A  Wall  Street  term  ;  manipulating  the 
market. 

Right.  As  a  financial  term  the  word  means  the  right  or 
privilege  to  subscribe  for  a  stock  or  bond. 

When  a  company  proposes  to  increase  its  capital  stock  it 
is  the  custom  for  it  to  give  its  stockholders  the  right,  in  pref- 
erence to  the  general  public,  to  subscribe  for  the  new  stock  in 
amounts  proportionate  to  their  holdings  of  the  old  stock. 

An  allotment  or  accepted  subscription  in  an  underwriting  is 
ti  right. 

Ring.  The  term  ring  applies  to  a  group  of  capitalists  (or 
speculators)  who  are  joined  together  in  a  transaction  or  deal ; 
specifically,  it  applies  to  a  combination  of  persons  as  distin- 
guished from  a  combination  of  concerns  or  interests. 

For  instance,  ring  applies  to  a  clique  or  coterie  of  persons 
who  are  striving,  by  previous  arrangement  among  themselves, 
for  the  same  end,  but  each  for  his  own  account,  as  a  ring  in  a 
stock,  the  persons  in  which  are  endeavoring  to  advance  the 
stock  by  buying  simultaneously  or  to  depress  it  by  selling 
simultaneously,  but  each  for  himself.  When  they  act  collec- 
tively for  their  united  risk  and  benefit  the  term  pool  applies; 
see  Pool. 

The  term  ring  is  sometimes  applied  to  a  combination  of 
separate  concerns  or  interests  by  an  understanding  or  by  a 
compact  (as  a  pool),  but  not  by  an  actual  consolidation.  In 
such  a  case  the  term  combination  or  combine  should  be  em- 
ployed. To  an  actual  consolidation,  when  the  purpose  is  to 
control  a  particular  industry  or  business  the  term  trust  prop- 
erly applies. 

Combine  is  a  newer  term  than  cither  ring  or  trust  and  has 
been  rather  loosely  used. 


448  SMITHS  FINANCIAL  DICTIONARY. 

In  Great  Britain  the  term  ring  is  applied  to  a  group  or  syn- 
dicate of  firms  or  individuals  formed  to  work  a  certain  indus- 
try together  and  prevent  competition.  A  shipping  ring  is  a 
ring  of  shipovvrners.  (Much  the  same  as  an  American  com- 
bine). 

Ringing  out.  This  is  an  operation  by  which  a  transaction 
in  a  future  in  grain,  cotton,  coffee  or  other  commodity  may  be 
concluded  before  the  maturity  of  the  contract. 

Illustration:  A  sells  to  B  for  delivery  in  some  stipulated 
month  in  the  future.  B  sells  to  C,  C  sells  to  D  and  D  sells 
to  A.  Thus  a  ring  is  formed.  Each  has  bought  and  sold  and 
no  actual  delivery  is  required. 

In  a  transaction  in  a  future  each  party  to  it  (the  buyer  as 
well  as  the  seller)  deposits  a  margin  with  a  designated  de- 
pository as  security  for  the  performance  of  his  part  of  the 
contract.  When  the  ring  is  complete  a  common  settling  price 
is  fixed  by  the  proper  authority  of  the  exchange  on  which  the 
transaction  took  place. 

Say  A  sold  at  12  and  bought  back  at  10  1-2 — the  difference  is 
I  1-2  in  his  favor.  The  settling  price  is  11,  say.  Since  A  sold 
to  B  at  12  he  collects  the  difference  between  12  and  11,  which 
is  I,  from  B.  Then,  since  he  bought  from  D  at  10  1-2  he  col- 
lects the  difference  between  10  1-2  and  11,  which  is  1-2,  from 
D.  Thus,  between  B  and  D  he  collects  his  total  difference. 
But  suppose  A  liad  sold  at  10  1-2  and  bought  back  at  12. 
Then,  he  would  pay  B  1-2  and  pay  D  i. 

Contracts  in  stocks  w.  i.  (when  issued — see  When  issued) 
are  also  ringed  out  in  the  same  manner  as  contracts  in  futures 
in  grain,  cotton,  coffee,  etc. 

Ring  settlement.  The  settlement  of  contracts  in  which  a 
ring  has  been  formed.     See  Ringing  out. 

Rising  averages.  The  weekly  statement  of  the  associated 
banks  of  New  York  gives  the  average  deposits,  loans,  cash 
holdings,  etc.,  of  the  banks  for  the  week.  When  these  items 
are  increasing  in  amount  the  bank  statement  is  said  to  be 
made  up  on  rising  averages.  The  opposite  of  rising  averages 
is  falling  averages.  For  additional  information  see  Bank  state- 
ment. 

Rising   exchange.     If    foreign    exchange    is    quoted    in    the 


SMITH'S  FINANCIAL  DICTIONARY.  449 

money  of  the  country  where  issued  a  rising  rate  for  it  signifies 
that  the  exchange  situation  is  against  the  country  where  the 
exchange  is  issued  and  in  favor  of  the  country  where  it  is  pay- 
able. In  other  words,  exchange  is  more  costly — the  money  of 
the  country  where  the  exchange  is  payable  costs  more  in  the 
money  of  the  country  where  the  exchange  is  issued.  For  in- 
stance, exchange  on  London  is  quoted  in  New  York  in  dollars 
(and  cents)  and  when  the  rate  is  rising  the  pound  sterling 
costs  more  in  dollars  (and  cents). 

If  foreign  exchange  is  quoted  in  the  money  of  the  country 
where  it  is  pa3'able  a  rising  rate  for  it  signifies  that  the  ex- 
change situation  is  in  favor  of  the  country  where  the  exchange 
is  issued  and  against  the  country  where  it  is  payable.  In 
other  words,  exchange  is  less  costly — more  in  the  money  of 
the  country  where  the  exchange  is  payable  ih  obtainable  in 
the  money  of  the  country  where  the  exchange  is  issued.  For 
instance,  exchange  on  Paris  is  quoted  in  New  York  in  francs 
and  when  the  rate  is  rising  more  in  francs  (and  centimes)  can 
be  obtained  for  the  dollar. 

The  opposite  of  rising  exchange  is  falling  exchange ;  see 
Falling  exchange  . 

Rolling  stock.  The  rolling  stock  of  a  railroad  consists  of 
its  cars  and  locomotives. 

Roman  numerals.  I,  V.  X,  L,  C,  D,  M — in  their  order,  i,  5, 
10,  50,  100,  500,  1,000. 

Room  trader.  One  who  is  a  member  of  an  exchange  and 
speculates  in  the  room  (on  the  floor  of  the  exchange)  for  his 
own  account. 

When  a  room  trader  on  the  New  York  Stock  Exchange  pur- 
chases a  stock  he  tries  at  once  or  as  soon  as  possible  to  sell  it 
at  a  pro§t.  Likewise,  when  he  sells  a  stock  short  (sells  stock 
Avhich  he  does  not  own)  he  tries  at  once  or  as  soon  as  possible 
to  buy  it  back  at  a  profit.  He  is  not  ready,  as  is  the  London 
jobber,  to  either  buy  or  sell  at  prices  named  by  himself,  but 
he  bids  for  (offers  to  buy)  or  offers  (offers  to  sell)  stock  ac- 
cordingly as  he  thinks  he  may  be  able  to  make  a  profit  by 
probable  subsequent  changes  in  the  price.  It  is  his  purpose 
each  day  if  practicable  to  even  up — to  sell  as  many  stocks  as 
he  has  bought  or  to  buy  as  many  stocks  as  he  has  sold. 

The   member  of  the   London   Stock   Exchange  who   corre- 


450  SMITH'S  FINANCIAL  DICTIONARY. 

sponds  in  a  measure  to  the  room  trader  on  the  New  York  Stock 
Exchange  is  the  jobber.  The  London  jobber  is  not  a  broker. 
He  deals  wholly  for  himself.  He  is  practically  a  wholesale 
dealer  in  securities,  buying  as  well  as  selling.  He  will  either 
buy  or  sell  at  prices  named  by  himself.  The  jobber  does  not 
deal  with  the  outsider  (the  speculator  who  is  not  a  member  of 
the  exchange).  The  broker  receives  the  order  from  the  out- 
sider and  in  executing  it  deals  with  the  jobber.  The  broker- 
goes  to  the  jobber  and  without  saying  whether  he  wishes  to  buy 
or  sell  asks  the  jobber  to  "make  a  price."  The  jobber  names 
two  prices,  for  instance,  99  3-8  and  99  5-8,  meaning  that  he 
will  buy  at  the  lower  price  or  will  sell  at  the  higher  price.  The 
jobber  expects  to  undo  or  cover  the  bargain  (transaction)  by 
a  fresh  transaction  with  another  jobber  or  broker  whereby  he 
will  sell  stock  that  he  has  bought  or  will  buy  stock  that  .he  has 
sold. 

Round  lot.  In  stocks  a  large  even  number  of  shares  bought 
or  sold  in  one  lot,  as  1,000,  5,000,  10,000. 

Round  transaction.  A  round  transaction  is  a  transaction 
made  and  closed — that  is,  first  buying  and  then  selling,  or  the 
reverse,  first  selling  and  then  buying. 

Royal  Exchange.  The  exchange  in  London  where  dealings 
in  foreign  exchange  are  carried  on. 

Rule.  The  rule,  in  financial  or  commercial  matters,  means 
the  usage  or  practise. 

Under  the  rule  is  a  New  York  Stock  Exchange  term ;  see 
Under  the  rule. 

For  requirements  as  to  stock  certificates  and  bonds  see 
Rules  for  delivery. 

Rules  for  delivery.  The  following  rules  for  delivery  are 
those  of  the  New  York  Stock  Exchange  and  they  apply  in  a 
general  way  in  transactions  in  securities  elsewhere  than  on 

the  exchange : 

I.  Securities  admitted  to  dealings  upon  the  New  York  Stock  Ex- 
change, registered  and  transferable  in  the  Borough  of  Manhattan,  city  of 
New  York,  in  conformity  with  the  requirements  of  Section  1,  Art.  XXXIII 
of  the  Constitution,  are  a  delivery : 

(a)  Certificates  of  stock  for  100  shares  or  odd  lots  aggregating  100 
shares,  with  irrevocable  assignment  for  each  certificate,  and  in 
the  name  of  a  member  or  his  firm,  registered  and  doing  busi- 
ness in  the  Borough  of  Manhattan.  Certificates  for  the  exact 
amount  or  aggregating  the  amount  of  an  odd  lot. 


SMITH'S  FINANCIAL  DICTIONARY.  45i 

(bj      Or,  with   irrevocable  assignnieiU   wilne.s^ed  by    or  correctness  of 
signature  guaranteed  by  such  member  or  his  firm. 

(c)  Or,  with  irrevocable  assignment  and  power  of  substitution  and  a 

separate  guarantee  by  such  member  or  his  firm    for  each  power 
of  substitution. 

(d)  Coupon  bonds   payable   to  bearer    in   denominations   of  $500  or 

$1,000  each,  with  proper  coupons  of  ihc  bond's  number  securely 
attached.  Small  bonds  (under  $500)  only  in  special  transac- 
tions. 
The  money  value  of  a  missing  coupon  may  be  substituted  only 
with  the  consent  of  the  committee  on  securities  for  each  de- 
livery. 

(e)  Registerable   coupon  bonds   in   denominations   of  $500  or  $1,000 

registered  to  bearer,  or  when  transfer  books  are  closed  with  an 
assignment  to  bearer  for  each  bond  by  a  member  or  his  firm  or 
witnessed  by  a  member  or  the  correctness  of  the  signature 
guaranteed  by  a  member  or  his  firm,  registered  and  doing  busi- 
ness in  the  Borough  of  Manhattan. 
{i)  Registered  bonds  in  denominations  not  exceeding  $10,000  prop- 
erly assigned. 

2.  Securities  contracted  for  in  amounts  exceeding  100  shares  of  stock 
or  $10,000  in  bonds  may  be  tendered  in  lots  of  100  shares  of  stock  or  $10,000 
in  bonds,  or  any  multiple  of  either,  and  must  be  accepted  and  paid  for  as 
delivered- 

3.  Securities  with  assignment  or  power  of  substitution  signed  by  an 
insolvent  are  not  a  deliverJ^  During  the  close  of  transfer  books  such 
securities  held  by  others  than  the  insolvent  are  a  delivery  if  accompanied 
by  an  affidavit  f^r  each  certificate  or  bond  that  said  securities  were  held  on 
a  date  prior  to  the  insolvency. 

Securities  with  assignment  or  with  power  of  substitution  guaranteed 
by  a  member  or  his  firm  suspended  for  insolvency  are  not  a  delivery  and 
must  be  reguaranteed  by  a  solvent  member  or  his  firm. 

4.  Securities  in  the  name  of  a  deceased  person  or  a  firm  that  has 
ceased  to  exist  are  not  a  delivery  except  during  the  closing  of  the  transfer 
books.  The  assignment  must  be  proved  or  acknowledged  before  a  notary 
public.     (Form  No.  3;  for  witness  Nos.  10  and  11). 

Securities  with  either  the  assignment  or  any  power  of  substitution 
witnessed  by  a  deceased  person  are  not  a  delivery. 

5.  Securities  assigned  or  a  power  of  substitution  by  a  firm  that  has 
dissolved  and  is  succeeded  by  one  of  the  same  name  are  a  delivery  when 
the  new  firm  shall  have  signed  the  statement  "Execution  guaranteed,"  under 
a  date  subsequent  to  the  formation  of  the  new  firm. 

6.  Securities  in  the  name  of  a  coi'poration  or  an  institution  or  in  a 
name  with  official  designation  are  not  a  delivery  unless  assignment  is  sworn 
to  before  a  notary  public.  The  notary  public  must  also  make  a  deposition 
that  he  has  seen  the  minutes  of  the  institution  authorizing  the  person  or 
persons  signing  to  make  the  assignment.  (Forms  Nos.  8  and  9).  A  cer- 
tified copy  of  the  resolutions  of  the  proper  authorities  of  the  company  in 


452  SMITH'S  FINANCIAL  DICTIONARY. 

whose  name  the  security  stands,  authorizing  the  assignment   and  giving 
date  of  adoption,  must  accompany  the  security. 

7.  Securities  with  an  assignment  or  a  power  of  substitution  signed  by 
trustees,  guardians,  infants,  executors,  administrators,  agents  or  attorneys 
are  not  a  delivery. 

8.  Securities  assigned  by  a  married  woman  are  not  a  deUvery.  A 
joint  assignment  and  acknowledgment  by  husband  and  wife  before  a  notary 
public  will  make  such  security  a  delivery  only  while  the  transfer  books  are 
closed.     (Form  No.  4). 

9.  Securities  in  the  name  of  an  unmarried  woman  with  the  prefix 
"Miss"  are  a  delivery  without  notarial  acknowledgment  when  signed  "Miss." 

10.  Securities  in  the  name  of  an  unmarried  woman  without  the  pre- 
fix "Miss",  or  a  widow,  are  a  delivery  only  when  the  assignment  is  ac- 
knowledged before  a  notary  public.     (Form  No.  5). 

11.  In  the  case  of  securities  of  a  company  whose  transfer  books  are 
closed  indefinitelj''  for  any  reason,  legal  or  otherwise,  the  assignment  and 
each  power  of  substitution  must  be  acknowledged  before  a  notary  public. 
(Forms  Nos.  2  and  3;  for  witness  Nos.  10  and  11). 

12.  Securities  in  the  name  of  foreign  residents  are  not  a  delivery  on 
the  day  the  transfer  books  are  closed  for  payment  of  a  dividend  or  regis- 
tered interest   and  reclamation  can  only  be  made  on  that  day. 

13.  Securities  in  the  name  of  foreign  residents  must  be  accompanied 
by  an  acknowledgment  before  a  United  States  consul  or  J.  S-  Morgan  & 
Co.,  London,  when  required  by  transfer  agents. 

Several  companies  having  transfer  offices  at  the  Grand  Central  Station, 
New  York,  make  this  requirement. 

14.  A  certificate  of  stock  on  which  the  name  of  a  transferee  has  been 
filled  in  in  error  may  be  made  a  delivery  during  the  closing  of  the  transfer 
books  by  ruling  of  the  committee  on  securities.  Necessary  form  of  release, 
cancellation  and  reassignment  will  be  furnished  on  application  to  the  com- 
mittee on  securities. 

15.  An  indorsement  by  a  member  or  his  firm,  registered  and  doing 
business  in  the  Borough  of  Manhattan,  or  the  signature  as  a  witness  by 
such  a  member  of  a  signature  to  an  assignment  or  a  power  of  substitution  is 
a  guarantee  of  its  correctness.  Each  power  of  substitution,  as  well  as  the 
assignment,  must  be  so  guaranteed   or  witnessed. 

16.  The  receiver  of  stock  may  demand  delivery  by  transfer  when  the 
transfer  books  are  open  and  must  give  ample  time  in  which  to  make  trans- 
fer. The  seller  may  demand  payment  for  the  securities  at  the  time  and 
place  of  transfer.  The  seller  may  make  delivery  by  transfer  when  personal 
liability  attaches  to  ownership. 

17.  When  a  claim  is  made  for  a  dividend  on  stock  after  the  transfer 
books  have  been  closed  the  party  in  whose  name  the  stock  stands  may  re- 
quire from  the  claimant  presentation  of  the  certificate,  a  written  statement 
that  he  was  the  holder  of  the  stock  at  the  time  Qi  the  closing  of  the  books,  a 
guarantee  against  any  future  demand  for  (he  same,  and  the  privilege  to 
record  on  the  certificate  evidence  of  the  payment  by  cash  or  due  bill. 

18.  "Coupon  bonds  issued  to  bearer,  having  an  indors^cnt  upon  them 


SMITH'S  FINANCIAL  DICTIONARY.  453 

not  properly  pertaining  to  them  as  a  security,  must  be  sold  specifically  as  'in- 
dorsed bonds,'  and  are  not  a  delivery,  except  as  'indorsed  bonds.'  "  Ex- 
tract from  resolutions  of  governing  committee,  adopted  May  23,  1883. 

A  definite  name  of  a  person,  firm,  corporation,  an  association,  etc.,  such 
as  "John  Smith,"  "Brown,  Jones  &  Co.,"  "Consolidated  Bank"  appearing 
upon  a  coupon  bond  and  not  placed  there  for  any  purpose  of  the  company  by 
any  of  its  officers  implies  ow^nership  and  is  an  "indorsed  bond"  under  the 
above  resolution. 

19.  Any  indorsement  on  a  coupon  bond  stating  that  it  has  been  de- 
posited with  a  state  for  bank  circulation  or  insurance  requirement  may  be 
released  and  release  acknowledged  before  a  notary  public ;  it  will  then  be  a 
delivery  as  a  "released  indorsed  bond." 

"rights"  to  subscribe. 

20.  Assignments  of  "rights,"  with  the  signature  of  the  assignor  wit- 
nessed and  guaranteed  in  the  same  manner  as  other  assignments  as  pro- 
vided in  these  rules,  are  a  delivery : 

(a)  An  assignment  of  the  "rights"  accruing  on  each  100  shares    or 

assignments  of  "rights"  on  odd  lots  aggregating  the  "rights"  on 
100  shares. 

(b)  An  assignment  for  the  exact  amount   or  assignments  aggregating 

the  amount  on  a  sale  of  the  "rights"  accruing  on  an  odd  lot  of 
stock. 

21.  Assignments  of  "rights"  in  the  name  of  a  married  woman,  widow 
or  an  unmarried  woman  are  a  delivery  without  notarial  acknowledgment. 

22.  Assignments  of  "rights"  made  by  a  deceased  person  or  a  firm  that 
has  ceased  to  exist  are  not  a  delivery  and  must  be  taken  back  by  the  party 
delivering  them. 

23.  Assignments  of  "rights"  signed  by  trustees,  etc.,  or  for  corpora- 
tions, etc.,  are  not  a  delivery  until  passed  by  the  committee  on  securities. 

24.  Assignments  of  "rights,"  except  those  sold  specifically  for  "cash," 
can  be  delivered  or  demanded  only  on  the  date  fixed  for  delivery  by  the 
committee  on  securities. 

25.  Due  bills  for  assignment  of  "rights"  on  borrowed  stock  must  be 
redeemed  on  the  date  fixed  for  the  delivery  of  assignments  of  "rights." 

26-  Due  bills  for  "rights"  accompanying  stock  which  by  ruling  of  the 
committee  on  securities  does  not  sell  "ex-rights"  at  the  closing  of  the 
books  must  be  redeemed  on  the  specific  date  fixed  by  the  committee  on 
securities. 

27.  Due  bills  for  "rights"  or  an  assignment  of  "rights"  for  all  accrued 
"rights"  must  accompany  securities  delivered  on  a  time  contract. 

When  the  right  to  subscribe  terminates  before  the  maturity  of  a  time 
contract  special  ruling  will  be  made  by  the  committee  on  securities. 

28.  If  default  is  made  "rights"  may  be  bought  or  sold  for  the  account 
of  the  party  in  default  at  the  place  in  the  exchange  where  "rights"  are 
traded  in. 

RECL.\MATI0NS. 

29.  Reclamations  for  irregularity  in  securities  must  be  made  within 
ten  days  from  the  date  of  delivery.     (Article  XXIX,  Constitution).     Claims 


454  SMITH'S  FINANCIAL  DICTIONARY. 

must  be  made  before  2.15  p.  m.  An  irregular  security  having  been  de- 
livered may  be  returned  to  the  party  who  delivered  it,  who  must  imme- 
diately give  the  party  presenting  it  either  the  security  in  proper  form  for 
delivery  or  pay  the  market  price  of  the  security  and  assume  all  liability  for 
non-delivery.  In  the  latter  case  the  security  in  proper  form  may  be  de- 
livered to  the  claimant  before  2.15  p.  m.  and  the  amount  paid  shall  be  re- 
turned. 

SIGNATURES    TO   ASSIGNMENTS. 

30.  The  signature  to  an  assignment  or  a  power  of  substitution  must 
be  technically  correct,  i-  e.,  it  must  correspond  in  every  particular,  without 
any  change,  with  the  name  in  which  the  security  is  issued,  and  the  name  of 
the  attorney  or  substitute. 

The  date  of  an  assignment  or  a  power  of  substitution  must  be  legible 
and  any  correction  properly  noted  by  the  signer. 

(a)  Titles  must  be  prefixed  or  afifixed  to  signatures  exactly  a-s  they 

are  in  the  name  in  which  the  security  is  issued. 

(b)  "Brothers"  or  "Bros."'  must  be  written  as  it  appears  in  the  secu- 

rity. 

(c)  "And"  or  "&,"  "Company"  or  "Co."  may  be  written  either  way. 

(d)  "Mr.,"   "Mrs.,"   "Esq."  or  the  residence  or  business  address  of 

an  individual  or  firm  need  not  be  made  part  of  the  signature. 
The  committee  recommends :  That  transfer  agents  be  given  the  exact 
form  of  the  name  to  which  securities  are  to  be  transferred.  That  the  sig- 
natures of  all  members  and  the  firm  signatures  of  each  of  the  partners  in  a 
member's  firm  doing  business  in  the  Borough  of  Manhattan  be  filed  with 
transfer  offices  in  order  to  secure  promptness  of  transfer  of  securities. 

ASSIGNMENTS   AND   NOTARIAL  ACKNOWLEDGMENTS. 

A  detached  assignment  of  a  security  must  contain  provision  for  the 
appointment  irrevocable  of  an  attorney  and  substitute  and  a  full  description 
of  the  security,  i.  e.,  name  of  company,  issue,  certificate  or  bond  number 
and  amount  (the  latter  written  in  words  and  numerals),  and  must  be 
acknowledged  before  a  notary  public  with  seal  and  date.  This  description 
must  be  in  the  same  handwriting  as  the  other  facts  stated.  A  separate  as- 
signment must  accompany  each  certificate  or  bond. 

In  the  acknowledgment  of  an  assignment  or  power  of  substitution  in. 
the  name  of  an  individual  the  notary  public  must  certify  with  seal  and  date 
that  he  knows  the  person  signing  to  be  the  person  named  in  the  security  or 
in  the  power  of  substitution  and  that  the  signer  acknowledged  his  signa- 
ture.    (Form  No.  2). 

In  an  assignment  or  power  of  substitution  in  the  name  of  a  firm  the 
notary  public  must  certify  that  he  knows  the  person  and  knows  him  to  be 
(or  to  have  been  on  the  date  of  execution)  a  member  of  the  firm,  and  that 
he  acknowledged  that  he  executed  the  assignment  or  power  of  substitution 
as  the  act  and  deed  of  the  firm.     (Form  No.  3)- 

In  proving  before  a  notary  public  an  assignment  or  power  of  substitution 
the  witness  must  make  deposition  that  he  knows  the  person  who  executed 
the  assignment  or  power  of  substitution  to  be  the  person  named  in  the 
security  or  assignment  and  saw  the  signer  execute  the  same.     For  assign- 


SMITH'S  FINANCIAL  DICTIONARY.  455 

ments  of  securities  in  the  name  of  a  firm  the  witness  must  make  deposition 
that  he  knows  the  party  signing  to  be  (or  to  have  been  at  the  date  of  ex- 
ecution) a  member  of  the  firm.     (Forms  Nos.  lo  and  ii). 

Any  alteration  in  the  wording  of  an  assignment  must  be  stated  over  the 
signature  of  the  party  signing. 

Any  aheration  in  a  notary's  acknowledgment  must  be  noted  by  signa- 
ture of  the  notary. 

ASSIGNMENT — POWER  OF  SUBSTITUTION. 

I'onii  Xo.  J. — Form  of  assignment  on  a  certificate  of  stock  accepted  by 
the  committee  on  stock  list : 

For  value  received hereby  sell,  assign  and  transfer  unto 

shares  of  the  capi- 
tal stock  represented  by  the  within  certificates,  and  do  hereby  irrevocably 

constitute  and  appoint attorney  to_  transfer  the 

said  stock  on  the  books  of  the  within  named  company  with  full  power  of 
substitution  in  the  premises. 

Dated 19 


In  presence  of 


Power  of  substitution  to  be  placed  on  the  back  of  a  certificate  when 
name  of  attorney  has  been  filled  in  with  the  name  of  an  individual  or  a  firm : 

I   for  we]  hereby  irrevocably  constitute  and  appoint 

my    [or  our]    substitute   to   transfer  the   within 

named  stock  under  the  foregoing  power  of  attorney,  with  like  power  of 
substitution. 

Dated 19 


In  the  presence  of 


FORMS     FOR     NOT.\RIAL    ACKNOWLEDGMENTS     AND    DEPOSITIONS     PRESCRIBED    BY 

THE   COMMITTEE   ON    SECURITIES. 

Form  No.  2. — Acknowledgment  by  an  individual  by  whom  an  assign- 
ment or  a  power  of  substitution  is  executed  : 

State  of ) 

County  of ) 

On  this day  of .ig before  me, 

a  notary  public  for  the  county  of personally 

appeared to  me  known,  and  known  to  me   to 

be  the  individual  named  in  the  within  certificate,  and  described  in  and  who 
e.xecutcd  the  foregoing  instrument,  and  acknowledged  to  me  that  he  ex- 
ecuted the  same. 


[seal] 


Tf  used  for  a  power  of  substitution  subslitute  for  the  word  "instrument," 
"power  of  substitution,  dated 19 "  the  date  re- 
ferred to  filled  in. 


456  SMITH'S  FINANCIAL  DICTIONARY. 

Form  No.  3. — Acknowledgment  for  firm : 

State  of ] 

)■  ss. 

County  of ) 

On  this day  of 19 before  me, 

a  notary  public  for  the  county  of personally 

appeared to  me  known,  and  known  to  me  to 

be  one  of  the  firm  of named  in  the 

within  certificate,  and  described  in  and  who  executed  the  foregoing  instru- 
ment, and  acknowledged  to  me  that  he  executed  the  same  as  the  act  and 
deed  of  said  firm. 


[seal] 


If  used  for  a  firm  that  has  dissolved  omit  the  word  "be"  in  fourth  line 
and  substitute  the  words  "have  been  on 19.  . .  ." 

If  used  for  a  power  of  substitution  executed  by  a  firm  that  has  dis-' 
solved,  substitute  for  the  word  "instrument,"  "power  of  substitution,  dated 
19 "  the  dates  referred  to  filled  in. 

Form  No.  4. — Joint  acknowledgment  or  execution  of  an  assignment 
made  by  husband  and  wife  : 

State  of I 

yss. 
County  of ) 

On  this day  of 19 before 

me  came and her  husband, 

both  of  them  known  to  me,  and  they  severally  acknowledged  that  they  ex- 
ecuted the  foregoing  (or  within)  assignment  and  power  of  attorney  for 
the  purpose  therein  mentioned. 


[seal] 


Form  No.  5. — Acknowledgment  of  an  assignment  executed  by  an  un- 
married woman  or  a  widow  : 

State  of I 

;-  .';s. 
County  of ) 

On  this day  of 19.  . .  .before 

me  personally  came to  me  known  and  known  to  me 

(or  satisfactorily  proven  to  me)  to  be  an  unmarried  woman  (or  widow) 
and  known  to  me  to  be  the  same  person  named  in  the  within  certificate  of 
stock  and  described  in  and  who  executed  the  foregoing  (or  within)  assign- 
ment and  power  of  attorney,  and  acknowledged  to  me  that  she  executed  the 
same  for  the  purpose  named. 


[seal I 


Form  No.  6. — Notarial  acknowledgment  for  assignment  or  a  power  of 
substitution  executed  by  a  member  suspended  for  insolvency : 


SMITH'S  FINANCIAL  DICTIONARY.  457 

State  of ) 

■ss. 
County  of ) 

On  this day  of 19 ... .  before  me, 

a  notary  public  for  the  countj'  of personally 

appeared to  me  known,  and  known  to  me  to 

be  the  individual  named  in  the  within  certificate,  and  described  in  and  who 
executed  the  foregoing  instrument,  and  acknowledged  to  me  that  he  ex- 
ecuted the  same  on 19 


[seal] 


ss. 


If  used  for  a  power  of  substitution  substitute  the  words  "power  of  sub- 
stitution dated 19....,"  for  the   word  "instrument." 

Form  No.  7. — Notarial  acknowledgment  for  assignment  or  a  power  of 
substitution  e.xecuted  by  a  firm  suspended  for  insolvency : 

State  of \ 

County  of ) 

On   this day   of 19. ..  .before   me, 

a  notary  public  for  the  county  of personally 

appeared to  me  known,  and  known  to  me  to 

be  one  of  the  firm  of named  in  the 

within  certificate,  and  described  in  and  who  executed  the  foregoing  instru- 
ment, and  acknowledged  to  me  that  he  executed  the  same  on 

19. .  .  .as  the  act  and  deed  of  said  firm. 


[se.al] 


If  used  for  a  firm  that  has  dissolved  substitute  the  words  "have  been" 
for  the  word  "be"  in  fourth  line. 

For  a  power  of  substitution,  substitute  the  words  "power  of  substitution 
dated 19. . . .,"  for  the  word  "instrument." 

Form  No.  8. — Deposition  by  an  officer  or  officers  executing  assignment 
of  or  power  of  substitution  on  a  security  in  the  name  of  an  association  or 
a  corporation : 
State  of J 

County  of ) 

On  this day  of 19. . .  .before  me,  a 

notary  public  for  the  county  of personally  came 

to  me  known,  who  being  by  me  first  duly  sworn,  did 

depose  and  say  that  he  resides  at that  he  is  the 

of  the corporation  named  in  the 

within  certificate,  and  described  in  and  who  executed  the  foregoing  instru- 
ment;  that  he  is  acquainted  with  the  seal  of  said  corporation,  and  that  the 
seal  affi.xed  to  such  instrument  is  such  seal,  and  was  so  affixed  by  authority 

of  the  board  of of   said   corporation,   and   that  by 

like  authority  he  executed  the  same. 

And  further,  I  have  seen  the  minutes  of  the 

of  the dated 19.  . .  .,   authorizing 

the  said to  make  this  assignment. 

[se.\l] 


45S  SMITH'S  FINANCIAL  DICTIONARY. 

If  tne  authorization  to  make  assignment  (or  to  sign  the  power  of  sub- 
stitution) requires  the  signature  of  more  than  one  officer  this  deposition 
must  be  made  to  conform,  the  notary  stating  their  respective  names,  that 

both  are  known  to  him.  that  they  reside  at and 

respectively,  that  they  are  the and 

•  respectively,  etc. 

Form  No.  9. — Deposition  for  an  officer  of  an  association  or  a  corpo- 
ration when  the  security  stands  in  his  name  with  his  title  affixed : 

State  of ) 

\  ss. 
County  of 1 

On   this day   of 19. . .  .before    me, 

a  notary  public  for  the  county  of personally  came 

to  me  known,  who  being  by  me  first  duly  sworn,  did  depose 

and  say  that  he  resides  at that  he  is  the 

of  the :   that  he  is   acquainted   with  the  seal  of 

said  corporation,  and  that  the  seal  affixed  to  the  above  instrument  is  such 

seal  and  was  so  affixed  by  the  authority  of  the  board  of 

of  said  corporation,  and  that  by  like  authority  he  executed  the  same. 

And  further,  I  have  seen  the  minutes  of  the 

of  the dated 19 .... ,  author- 
izing the  said to  make  this  transfer. 


[seal] 


ss. 


Form  No.  10. — Deposition  by  a  witness  of  the  execution  of  an  assign- 
ment or  a  power  of  substitution  by  an  individual : 

State  of "l 

County  of ) 

On   this day   of 19.... before   me, 

a  notary  public  for  the  county  of personally  appeared 

to  me  known,  who  being  by  me  first  duly  sworn 

did  depose  and  say  that  he  resides  at that  he  knew 

named  and   described   in  the 

instrument,  which  was  signed  in  witness's  presence. 


[seal] 


If  used  for  a  power  of  substitution  executed  by  an  individual   see  in- 
struction in  Form  No.  2. 

Form  No.  11. — Deposition  by  a  witness  of  the  execution  of  an  assign- 
ment or  a  power  of  substitution  by  a  firm: 

State  of ) 

County  of ) 

On    this day   of 19.... before    mc, 

a  notary  public  for  the  county  of personally  appeared 

to  me  known,  who,  being  by  me  first  duly  sworn,  did 

depose  and  say  that  he  resides  at that  he  knew 


.?.y. 


SMITH'S  FINANCIAL  DICTIONARY.  45Q 

and   kiu'w   him   to  be   one   of  the   firm   of named 

and  described  in  the instrument,  which  was  signed  in  wit- 
ness's presence. 


[seal] 


If  used  for  a  firm  that  has  dissolved  or  for  a  power  of  substitution 
executed  by  a  firm  that  has  dissolved  see  instructions  in  Form  No.  3. 

Form  No.  12. — Detached  assignment  and  power  of  attorney  for  stocks 
or  bonds : 

For  value  received have 

bargained,  sold,  assigned,  and  transferred,  and  by  these  presents  do  bar- 
gain, sell,  assign  and  transfer  unto shares  of 

the capital  stock  (or  one  [i]  bond)  of  the 

standing  in name  on 

the   books   of   said represented   by   certificate 

(or  -bond   for $ )    No 

herewith,  and do  hereby  constitute  and  appoint 

true  and  lawful  attorney,  irrevocable  for 

and  in name  and 

stead,  but  to use,   to  sell,  assign,  transfer  and  set 

over,  all  or  any  part  of  the  said  stock,  and  for  that  purpose  to  make  and 
execute  all  necessary  acts  of  assignment  and  transfer,  and  one  or  more 
persons  to  substitute  with  like  full  power,  hereby  ratifying  and  confirming 

all  that said  attorney  or 

substitute  or  substitutes  shall  lawfully  do  by  virtue  hereof. 

Dated 19 

In  presence  of 


Form  No    13- — Acknowledgment  on  a  detached  assignment  made  by  an 
individual : 

State  of l 

-  .yj. 
County  of ' 

On  this day  of 19.  . .  .before 

me,  a  notary  public  for  the  county  of personally  came 

• to  me  known  to  be  the  individual 

named  in  the  annexed  certificate  of  stock  (or  bond)  and  described  in  and 
who  executed  the  foregoing  instrument,  and  acknowledged  to  me  that  he 
executed  the  same. 


[se.\l] 


Form  No.  14. — Acknowledgment  on  a  detached  assignment  executed  by 
a  firm  : 

State  of J 

County  of \ 

On   this.. day   of 19.... before   me, 

a  notary  public  for  the  county  of personally 

appeared ■ to  me  known,  and  known   to  me  to 


46o  SMITH'S  FINANCIAL  DICTIONARY. 

be  one  of  the  firm  of named  in  the  an- 
nexed certificate  of  stock  (or  bond)  and  described  in  and  who  executed 
the  foregoina:  instrument,  and  acknowledged  that  he  executed  the  same  as 
the  act  and  deed  of  said  firm. 

[sealI 

If  used  for  a  firm  that  has  dissolved  see  instruction  in  Form  No.  .3. 

Runner.     A  messenger. 

Running  account.  Same  as  open  or  current  account ;  a 
continuing  account  in  which  settlement  is  made  at  intervals, 
as  every  30  days,  60  days  or  tw^elve  months. 

Run  off.  This  is  a  term  used  in  the  exchange  business. 
When  a  banker  has  sold  time  bills  of  exchange  (bills  payable 
at  a  future  time)  and  pays  them  at  maturity  (when  due)  in- 
stead of  renewing  (extending)  them  he  is  said  to  have  let  his 
bills  run  off  (in  contradistinction  to  letting  them  run  on). 

Run  on  a  bank.  When  the  depositors  in  a  bank  become 
alarmed  for  the  safety  of  their  money  and  seek,  en  masse,  to 
draw  it  out  of  the  bank  there  is  said  to  be  a  run  on  the  bank. 

Rupee  paper.  Securities  of  the  government  of  India,  in- 
terest and  principal  being  payable  in  rupees  in  India  and  by 
bills  of  exchange  on  Calcutta  in  England. 

Also  see  India  Council  bill. 


S.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  south  or  southern  or  stock  or  series  or  seller  (followed 
by  a  figure  or  figures  for  day  or  days)  or  shares.  A  transaction 
seller  4,  10,  20,  30  or  60  is  recorded  (printed)  thus :  RG.  75.  S4 
(or  10,  etc.),  meaning  that  Reading  stock  was  sold  at  75  and 
that  the  seller  may  on  one  day's  notice  to  the  buyer  deliver  it  at 
any  time  within  4  days  (or  10  days,  etc.)  ;  see  Seller's  option. 

Sack.  The  cotton  sack  in  which  flour  is  put  up  contains  140 
pounds.  To  convert  sacks  to  barrels  (196  pounds)  multiply 
the  number  of  sacks  by  5  and  divide  by  7. 


SMITH'S  FINANCIAL  DICTIONARY.  461 

In  Great  Britain  a  sack  contains  280  pounds. 

Safe  deposit  company.  Practically  a  warehouse  company ; 
a  company  for  the  safe  keeping  of  goods,  securities  and  other 
valuables,  which  also  rents  safes  on  its  premises  and  compart- 
ments in  its  vaults. 

The  New  York  state  banking  law  defines  a  safe  deposit  com- 
pany as  a  "corporation  formed  for  the  purpose  of  taking  and 
recei/ing  upon  deposit  as  bailee  for  safe  keeping  and  storage 
jewelry,  plate,  money,  specie,  bullion,  stocks,  bonds,  securities 
and  valuable  papers  of  any  kind,  and  other  valuable  personal 
property,  and  guaranteeing  their  safety  upon  such  terms  and 
for  such  compensation  as  may  be  agreed  upon  by  the  company 
and  the  respective  bailors  thereof,  and  to  rent  vaults  and  safes 
and  other  receptacles  for  the  purpose  of  such  safe  keeping  and 
storage." 

Safety-fund  system.  The  safety-fund  system,  so  called,  was 
adopted  in  New  York  state  in  1829.  The  banks  were  required 
to  establish  a  common  fund  for  the  security  of  the  holders  of 
their  notes  (and  at  first  for  their  depositors  as  well)  by  a  tax 
of  1-2  of  I  per  cent  annually  upon  the  capital  stock  of  the  banks 
until  the  fund  amounted  to  3  per  cent  of  the  capital.  Any 
encroachments  on  the  fund  were  to  be  made  good  by  further 
taxes  at  the  same  rate. 

From  1829  to  1841  no  demands  were  made  on  the  fund,  but  a 
series  of  bank  failures  in  1841  and  1842  developed  the  fact  that 
the  law,  apparently  by  oversight,  made  the  safety  fund  respon- 
sible, not  only  for  circulation,  but  for  all  the  debts  of  the  insol- 
vent banks.  This  discovery  resulted  in  the  exhaustion  of  the 
fund,  although  it  was  more  than  sufificient  in  amount  to  have 
redeemed  the  notes  of  the  failed  banks.  The  law  was 
amended,  but  the  damage  to  the  fund  had  been  done,  and  in 
the  period  while  the  deficit  was  being  made  good  and  a  new 
fund  accumulated  by  the  annual  tax  of  1-2  of  i  per  cent  there 
was  no  security  for  the  payment  of  notes  except  the  credit  of 
the  issuing  banks. 

The  safety  fund  system  was  not  terminated  until  1866  when 
the  charters  of  all  the  banks  operating  under  it  expired.  The 
surplus  left  was  then  turned  into  the  state  treasury.  In  so  far 
as  the  system  fell  short  of  absolute  success  the  fault  seems  to 
have  been  due  to  unsuspected  defects  in  the  letter  of  the  law 


462  SMITH'S  FINANCIAL  DICTIONARY. 

rather  than  to  any  weakness  in  the  principle  on  which  it  was 
based. 

Sales.  In  transactions  in  stocks,  grain,  cotton,  coffee  and 
other  things  dealt  in  on  exchanges  the  term  purchases  is  not 
used ;  the  term  sales  is  used  instead.  Whether  in  an  advancing 
market,  when  the  general  desire  is  to  purchase,  or  in  a  declin- 
ing" market,  when  the  general  desire  is  to  sell,  the  custom  is  to 
say  sales  amounted  to  or  were  so  much  and  not  to  say  pur- 
chases amounted  to  or  were  so  much. 

Sales  account.  The  correct  term  is  account  sales ;  see  Ac- 
count sales. 

Sales  bill.  This  term  is  sometimes  applied  to  a  bill  of  ex- 
change (draft)  drawn  against  goods  sold,  or  rather,  drawn  on 
the  buyer  of  the  goods.  A  better  term  is  commercial  bill. 
For  additional  information  see  Domestic  exchange ;  also  see 
Foreign  exchange. 

The  term  sales  bill  is  also  sometimes  used  in  the  sense  of 
account  sales ;  see  Account  sales. 

Sales  list.     See  Stock  lists. 

Salting.  A  colloquialism,  meaning  to  place  valuable  ore  in 
a  worthless  mine  to  deceive  a  possible  purchaser. 

Sample  crowd,  A  term  applied  to  brokers  who  deal  in  car- 
lots  of  grain  or  flour,  basing  their  dealings  on  exhibits  of 
samples  in  the  board  room  (on  the  floor  of  an  exchange). 

Sample  broker.  One  who  deals  in  car-lots  of  grain  or  flour 
by  means  of  samples. 

Sans  recours.     Without  recourse ;  see  Without  recourse. 

Satisfaction  piece.  A  formal  acknowledgment  in  writing  by 
one  who  has  received  payment  in  discharge  or  acquittance  or 
release  of  a  mortgage  or  judgment.  A  satisfaction  piece  in- 
cludes authority  for  its  entry  on  the  record. 

Satisfied."   A  judgment  or  a  debt  is  satisfied  when  it  is  paid. 

Savings  bank.  A  bank  of  deposit  the  depositors  in  which 
have  a  mutual  interest  in  the  profits  of  the  institution ;  in  other 
words,  an  institution  for  receiving  and  investing  savings, 
which  pays  interest  on  deposits  at  stated  intervals,  the  interest 
depending  as  to  rate  on  the  bank's  profit  from  investing  the  de- 
posits. 

The  banking  law  of  New  York  defines  a  savings  bank  as  "a 
corporation  duly  authorized  by  the  laws  of  this  state  to  receive 


SMITH'S  FINANCIAL  DICTIONARY.  463 

money  on  deposit  and  pay  such  rates  thereon,  and  to  invest 
the  same  in  such  securities  and  obligations  as  may  be  pre- 
scribed by  law." 

A  mutual  savings  bank  is  one  conducted  wholly  for  the  bene- 
fit of  the  depositors,  who  receive  in  the  form  of  interest  all 
profits  over  and  above  necessary  expenses  and  a  moderate  part 
of  the  profits  set  aside  in  a  surplus  fund  to  provide  for  unex- 
pected losses  or  contingencies. 

A  stock  savings  bank  is  one  organized  with  a  capital  stock 
and  the  stockholders  receive  in  dividends  the  profits  over  and 
above  the  interest  paid  on  deposits. 

A  savings  bank  in  New  York  state  is  not  required  to  keep  a 
reserve,  the  object  of  a  savings  bank  being  profitably  to  employ 
as  fully  as  possible  the  funds  entrusted  to  it.  It  may,  however, 
keep  on  hand  a  fund  not  exceeding  10  per  cent  of  its  deposits. 
A  savings  bank  is  subject  to  many  restrictions  as  to  the  char- 
acter of  its  investments  and  the  collateral  on  which  it  may  loan. 

Sawdust  game.  The  term  applied  to  the  swindle  which 
consists  of  the  pretended  sale  of  counterfeit  money  and  the 
delivery  to  the  buyer  of  a  package  containing  sawdust  (or 
some  other  worthless  article,  as  paper).  This  particular  form 
of  swindling  is  also  called  the  bunco  game. 

SB.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  small  bonds ;  see  Small  bond. 

SC.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  scrip  ;  see  Scrip. 

Scaling  down.  Cutting  down  or  reducing  proportionately 
or  on  a  scale,  as  scaling  down  interest. 

If  a  company  has  two  or  more  issues  of  bonds  not  bearing 
the  same  rate  of  interest  and  in  a  reorganization  of  the  com- 
pany or  a  refunding  of  its  bonds  the  rates  of  interest  on  the 
bonds  are  reduced  proportionately  the  operation  of  reducing 
the  interest  is  called  scaling  down  the  interest.  The  term  scal- 
ing down  does  not  apply  when  there  is  only  one  issue  of  bonds 
upon  which  the  rate  of  interest  is  to  be  reduced,  unless  the  rate 
of  interest  on  this  issue  is  to  be  reduced  a  certain  amount  at  the 
end  of  each  successive  specified  period.  If  the  rate  of  interest 
on  a  single  issue  of  bonds  is  simply  made  lower  without  provi- 
sion for  a  further  lowering  the  operation  is  described  as  re- 
ducing or  cutting  down  the  interest. 


464  SMITH'S  FINANCIAL  DICTIONARY. 

« 

If  a  company  which  has  two  or  more  classes  of  stock  lowers 
the  dividends  on  them  proportionately  the  operation  is  de- 
scribed as  scaling  down  dividends. 

Scalp.  A  speculative  colloquialism,  meaning  a  small  profit 
taken  quickly. 

Scalper.  An  appellation  for  a  speculator  who  seeks  small, 
quick  profits.  A  scalper  is  generally  a  member  of  an  exchange 
who  trades  for  his  own  account  and  has  not  to  pay  commis- 
sions. 

Scalping.     Speculating  for  quick,  small  profits. 

Scandinavian  Union,  The.  A  monetary  union  formed  by  the 
adoption  of  the  same  currency  system  by  Denmark,  Norway 
and  Sweden.     See  Moneys  of  the  world. 

Scratcher.  In  bookkeeping  a  colloquial  name  for  a  day- 
book. 

Scrip.  Usually  the  term  is  applied  to  a  certificate  for  a  frac- 
tion of  a  share  of  stock  and  usually,  also,  scrip  is  convertible 
into  shares  when  presented  in  amounts  equal  to  the  face  value 
of  a  full  share.  It  has  no  voting  or  dividend  rights  until  con- 
verted into  full  shares  of  stock,  although  tLometimes  interest  is 
paid  on  it. 

Scrip  was  also  the  name  given  to  United  States  paper  cur- 
rency of  denominations  less  than  $1  which  is  no  longer  issued ; 
such  money  was  commonly  called  shinplasters. 

In  Great  Britain  it  is  the  practise  to  issue  scrip  to  represent 
instalments  paid  on  subscriptions  for  stock ;  when  all  instal- 
ments are  paid  the  scrip  is  exchanged  for  stock  certificates. 

Scrip  dividend.  One  payable  in  scrip,  or  in  other  words,  a 
due  bill,  sometimes  bearing  interest  at  the  legal  rate  and 
usually  convertible  into  stock,  but  having  no  voting  power  and 
entitled  to  no  dividend  until  so  converted. 

Scrivener.  Former  name  for  a  notary  public  or  public 
writer;  also,  money  scrivener  was  a  former  name  for  a  money 
changer. 

Sea  island  cotton.  Cotton  grown  on  the  islands  off  the 
coasts  of  Florida,  Georgia,  South  Carolina  and  Texas. 

Sea  room.  Same  as  ocean  room ;  freight  accommodation  on 
an  ocean  vessel. 

Seasoned  securities.  Those  which  have  long  been  on  the 
market  and  have  something  like  an  established  value. 


SMITH'S  FINANCIAL  DICTIONARY.  465 

Seat.     A  designation  for  a  membership  in  an  exchange. 

Secondarily  liable.  The  person  primarily  liable  on  a  nego- 
tiable instrument  is  the  person  upon  whom  rests  the  absolute 
requirement  to  pay  it;  all  other  parties  are  secondarily  liable. 

The  maker  of  a  note  is  primarily  liable,  while  an  indorser  is 
secondarily  liable.  When  a  draft  has  been  accepted  the  ac- 
ceptor is  primarily  liable,  while  the  drawer  is  secondarily  liable. 
When,  however,  a  draft  has  not  been  accepted  the  drawer  is 
primarily  liable.  The  drawer  (issuer)  of  a  check  is  primarily 
liable,  while  an  indorser  is  secondarily  liable.  An  indorser  is 
always  secondarily  liable. 

Secondary  creditor.  A  creditor  whose  claim  is  second  in 
priority  of  lien. 

Second  board.  On  exchanges  where  there  are  calls  of  stocks 
and  bonds  or  calls  of  grain,  cotton,  etc.,  the  second  call  is  often 
designated  as  the  second  board.  Also,  tlie  second  printed  list 
of  sales  on  the  New  York  Stock  Exchange,  covering  the  period 
from  12  noon  to  2  p.  m.,  is  called  the  second  board. 

Second  hands.  Goods  are  said  to  be  in  second  hands  when 
they  have  passed  from  the  hands  of  manufacturers  or  im- 
porters into  the  next  succeeding  hands,  as  into  the  hands  of 
jobbers  or  wholesalers. 

Second  mortgage.  The  mortgage  that  is  a  lien  after  the 
first  mortgage. 

Second  mortgage  bond.  A  bond  issued  under  a  second 
mortgage ;  see  Second  mortgage. 

Second  of  exchange.  See  First,  second  and  third  of  ex- 
change. 

Second  teller.     The  receiving  teller  in  a  bank. 

Secretary.  The  secretary  of  a  stock  company  prepares  and 
keeps  its  records. 

Secretary  of  the  Treasury.  The  chief  fiscal  officer  of  the 
United  States  ;  he  is  a  member  of  the  President's  cabinet. 

Secret  partner.  A  partner  whose  interest  in  the  business  is 
kept  secret :  that  is,  withheld  from  public  knowledge. 

Secured.     Protected  against  loss. 

Secured  creditor.  A  creditor  whose  claim  is  secured  (pay- 
ment of  it  is  insured)  by  a  pledge  of  property  or  by  a  lien. 

Securities  company.  Same  as  holding  company ;  a  company 
wdiich  owns  the  securities  of  other  companies  and  depends  for 


466  SMITH'S  FIN^ANCIAL  DICTIONARY. 

its  income  upon  the  interest  and  dividends  yielded  by  tliese 
securities.  It  usually  issues  bonds  as  well  as  stock  itself. 
Its  bonds  are  collateral  trust  bonds,  being  secured  by  bonds 
or  stocks  of  other  companies  owned  by  it.  A  securities  com- 
pany is  not  necessarily  a  controlling  company — it  is  not  neces- 
sary that  it  should  possess  a  majority  of  the  stocks  of  the  com- 
panies whose  securities  constitute  or  are  included  in  its  assets. 

Security.  Something  of  value  pledged  for  the  performance 
or  fulfilment  of  a  contract,  as  the  payment  of  a  loan ;  also  a 
name  for  a  stock  or  bond. 

Security  bill.  The  name  given  to  a  bill  of  exchange  (draft) 
drawn  against  securities  (stocks  or  bonds)  which  are  attached 
to  (accompany)  and  serve  as  collateral  for  the  bill — as  a 
pledge  that  the  bill  will  be  paid. 

Seigniorage.  The  difference  between  the  cost  of  bullion  and 
the  value  of  the  coin  into  which  the  bullion  is  converted.  In 
the  coinage  of  gold  there  is,  of  course,  no  seigniorage  for  the 
reason  that  the  act  of  coining  adds  no  value  whatever  to  the 
metal.  Coinage  of  gold  is  merely  an  official  certification  of 
weight  and  quality  for  the  sake  of  convenience. 

Sell.  To  dispose  of  in  exchange  for  money  or  other  con- 
sideration. 

Seller  four,  ten,  twenty,  thirty  or  sixty.  When  a  stock  is 
so  sold  the  seller  has  the  right  to  deliver  it  to  the  buyer  on  any 
day  within  the  number  of  days  specified  on  one  day's  notice  to 
the  buyer.  The  seller  must  in  any  event  deliver  the  stock  on 
the  final  day. 

When  a  contract  is  of  four  or  more  days'  duration  the  buyer 
must,  unless  the  contract  is  flat  (without  interest),  pay  interest 
at  the  legal  rate  on  the  price  of  the  stock  up  to  the  day  of  de- 
livery. The  amount  of  a  dividend  becoming  due  on  the  stock 
during  the  pendency  of  the  contract  is  i^ayable  by  the  seller  to 
the  buyer. 

No  contract  on  seller's  (or  buyer's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  into  on 
the  New  York  Stock  Exchange. 

Seller's  option.  A  seller's  option  is,  in  effect,  a  put.  In 
stocks  sold  on  seller's  option  the  seller  may,  when  the  option  is 
for  more  than  three  days,  put  (deliver)  the  stock  on  any  day 
within  the  specified  time  on  one  day's  notice  to  the  buyer. 


SMITH'S  FINANCIAL  DICTIONARY.  467 

In  a  contract  for  four  or  more  days  the  buyer,  unless  the  con- 
tract is  flat  (without  interest),  pays  to  the  seller  interest  at  the 
leg-al  rate  on  the  price  of  the  stock  up  to  the  day  of  delivery. 
The  amount  of  a  dividend  becoming  due  during  the  pendency 
of  a  contract  is  payable  by  the  seller  to  the  buyer. 

No  contract  on  seller's  (or  buyer's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  into  on 
the  New  York  Stock  Exchange. 

A  future  contract  in  grain,  cotton,  coffee  or  other  specula- 
tive commodity  is  at  the  seller's  option  unless  otherwise  stipu- 
lated and  gives  the  seller  the  right  to  deliver  the  commodity 
on  any  business  day  in  the  month  of  delivery  on  due  notice  to 
the  buyer. 

Sellers  over.  London  Stock  Exchange  term,  meaning  that 
there  are  sellers  at  1-32  of  a  pound  over  a  given  figure  or  frac- 
tion (sixteenth). 

Seller  the  year.  A  contract  which  gives  the  seller  the  right 
to  make  a  delivery  of  the  property  at  any  time  within  the  year. 

No  contract  on  seller's  (or  buyer's)  option  for  less  than  4 
days  or  which  extends  beyond  60  days  can  be  entered  into  on 
the  New  York  Stock  Exchange. 

Selling  a  bear.  London  Stock  Exchange  term,  meaning  sell- 
ing short  in  expectation  of  a  decline  in  price ;  in  other  words, 
selling  stock  not  owned  in  expectation  of  buying  it  back  at  a 
lower  price.  The  term  means  the  same  as  the  New  York  Stock 
Exchange  term  selling  short. 

Selling  dividends.     See   Buying  and  selling  dividends. 

Selling  investment  securities.     See  Investment  securities. 

Selling  out.  When  a  broker  arbitrarily  closes  the  account 
(in  stocks  or  commodities)  of  a  customer  for  failure  to  provide 
margin  or  for  some  similar  reason  the  operation  is  described  as 
selling  out  the  customer. 

On  the  London  Stock  Exchange  when  a  seller  of  stock  or 
shares  does  not  receive  from  his  buyer  the  name  of  the  party  to 
whom  the  stock  is  to  be  transferred  (see  Name)  by  an  appointed 
time  he  is  entitled  to  sell  the  stock  out;  that  is,  to  instruct  the 
official  broker  to  make  a  fresh  sale  for  cash.  The  difference 
between  the  price  at  which  the  fresh  sale  is  made  and  that  of 
the  original  bargain,  together  with  the  official  broker's  commis- 


468  SMITH'S  FINANCIAL  DICTIONARY. 

sion,  is  charged  to  the  person  responsible  for  the  delay  in  pass- 
ing the  name. 

Selling  rate.  In  dealings  in  exchange  the  selling  rate  is  the 
rate  at  which  exchange  is  sold  by  a  dealer  in  it. 

Selling  short.  In  Wall  Street  this  consists  in  selling  stocks 
not  owned  and  borrowing  them  for  immediate  delivery.  When 
finally  bought  in  (covered)  the  borrowed  stocks  are  returned. 
If  in  the  interval  between  selling  and  buying  the  stocks  have 
declined  the  trade  is  profitable ;  if  there  has  been  an  advance  it 
is  unprofitable. 

Sending  in.  When  a  speculator  buys  (or  sells)  stock 
through  a  broker  with  whom  he  has  no  account  he  directs  this 
broker  to  "send  in"  the  transaction  to  a  broker  with  whom  he 
has  an  account.  The  first  broker  merely  executes  the  order; 
the  second  receives  (or  delivers)  the  stock. 

The  first  broker  in  such  a  case  acts  as  a  two-dollar  broker 
and  collects  his  fee  from  the  second  broker,  who  charges  the 
person  for  whom  the  stock  was  bought  or  sold  the  full  com- 
mission the  same  as  if  he  (the  second  broker)  had  executed  the 
order. 

Another  instance  of  sending  in  is  when  a  speculator  transfers 
his  account  from  one  broker  to  another.  In  such  a  case  he  di- 
rects the  broker  who  was  originally  employed  to  send  in  or 
transfer  his  contracts  to  the  second  broker.  It  is  the  same  if 
he  transfers  only  part  of  his  account  to  another  broker. 

Separable  contract.  A  contract  which  contains  distinct  and 
separable  specifications. 

Serial  bonds.  An  issue  of  bonds  diflferent  parts  or  amounts 
of  which  are  redeemable  at  specified  intervals.  For  instance, 
an  issue  of  $10,000,000  may  be  redeemable  $1,000,000  each  year 
until  at  the  end  of  ten  years  all  have  been  redeemed. 

Serial  notes.  A  series  of  promissory  notes  issued  in  dis- 
charge of  a  single  obligation  which  fall  due  (mature)  at  in- 
tervals. 

Set  of  exchange.  A  bill  of  (foreign)  exchange  drawn  in 
duplicate  or  triplicate  and  numbered  first  and  second  or  first, 
second  and  third  of  exchange.  Payment  of  any  one  copy  of 
the  bill  extinguishes  the  set.  For  additional  inforrnation  see 
First,  second  and  third  of  exchange. 

Settlement.     Adjustment  of  differences  in  money.     In   the 


SMITH'S  FINANCIAL  DICTIONARY.  469 

Operation  of  the  New  York  Stock  Exchange  clearing  house 
there  is  also  an  adjustment  of  differences  in  stocks;  for  in- 
formation see  New  York  Stock  Exchange  clearing  house.  On 
the  London  Stock  Exchange  a  settlement  occurs  fortnightly; 
see  Settlement,  The. 

Settlement,  The.  The  fortnightly  settlement  on  the  Lon- 
don Stock  Exchange,  which  formerly  lasted  for  three  con- 
secutive days,  now  takes  four  days,  as  the  "carry-over"  in 
mining  shares  begins  the  day  before  the  ordinary  carry- 
over. According  to  the  London  custom  payments  and  de- 
liveries in  stock  transactions  are  made  only  twice  a  month 
instead  of  every  day  as  is  the  case  in  New  York. 

A  broker  on  the  New  York  Stock  Exchange  must  each  day, 
immediately  after  the  close  of  the  exchange,  compare  his 
memoranda  of  purchases  and  sales  made  "regular  way"  with 
the  memoranda  of  those  with  whom  he  has  had  dealings.  This 
is  done  by  means  of  deliver  and  receive  tickets.  (See  Com- 
parison). On  the  following  day  before  2.15  p.  m.  all  transac- 
tions must  be  closed  by  actual  payment  and  delivery  or  adjust- 
ment through  the  stock  exchange  clearing  house. 

In  London,  on  the  contrary,  this  comparison  of  memoranda, 
adjustment  and  payment  of  differences  and  delivery  of  stocks 
occurs  only  twice  a  month.  The  exact  days  for  each  fortnightly 
settlement  in  London  are  fixed  considerably  in  advance  by  the 
committee  for  general  purposes. 

The  first  day  is  continuation  day  or  contango  day  or  mak- 
ing-up  da}^  or  carrying-over  day  in  mining  shares.  The  sec- 
ond day  is  another  (an  added)  continuation  day  in  mining 
shares.  The  second  day  is  continuation  day  in  other  securities. 
On  these  days  the  brokers  (not  the  jobbers,  but  the  ones  who 
represent  the  public  and  buy  from  or  sell  to  jobbers)  having 
found  out  from  their  clients  (customers)  whether  the  clients 
intend  to  pay  for  the  stocks  they  have  bought  or  intend  to  de- 
liver the  stocks  which  they  have  sold  or  whether  they  intend  to 
let  their  contracts  continue  until  the  next  settlement  proceed 
to  carry  over  such  bargains  as  are  to  be  continued.  This  is  ef- 
fected by  entering  into  a  fresh  contract,  which  is  of  a  double 
character.  Stock  that  has  been  bought  and  is  to  be  continued 
is  sold  for  cash  and  repurchased  for  the  new  account,  both 
bargains  being  put  through  at  the  "making-up  price," and  a  con- 


470  SMITH'S  FINANCIAL  DICTIONARY. 

I., 
tango  rate  (see  Contango)  is  generally  paid  to  the  broker  or 
jobber  who  takes  the  stock  in,  that  is  to  say,  lends  the  money 
to  pay  for  it  until  the  next  settlement.  But  if  a  stock  is  so 
much  oversold  that  it  is  scarce  for  delivery  the  buyer  who 
wants  to  continue  receives  a  backwardation.  (See  Backward- 
ation). Stock  that  has  been  sold  and  is  to  be  continued  is 
bought  for  cash  and  resold  for  the  new  account,  both  bargains 
being  put  through  at  the  making-up  price,  and  a  contango  rate 
is  generally  paid  to  the  seller  by  the  broker  or  jobber  who  lends 
the  stock  until  the  next  settlement.  But  if  a  stock  is  over-' 
sold  the  seller  who  does  not  wish  to  deliver  has  to  pay  a  back- 
wardation. 

The  third  day  is  called  ticket  day  or  name  day,  because  on 
this  day  tickets  (see  Ticket)  have  to  be  passed  (handed)  by 
the  brokers  who  have  bought  to  the  jobbers  from  whom  they 
have  bought,  containing  the  names  of  those  who  will  receive 
the  stocks  that  have  been  bought.  A  ticket  is  passed  on  until 
it  reaches  the  real  seller,  who  is  thus  enabled  to  complete  the 
transfer  deed  which  must  accompany  each  delivery.  (See 
Passing  a  name). 

The  fourth  day  is  settlement  day  or  pay  day,  the  day  on 
which  securities  are  delivered  and  paid  for,  or,  if  contracts  are 
to  be  continued,  the  differences  necessary  to  balance  accounts 
are  paid  in  money.     It  is  also  called  account  day. 

The  extra  continuation  day  in  mining  shares  w^as  made 
necessary  by  the  large  business  in  these  shares. 

The  settlement  in  consols  and  in  a  few  other  securities  of 
that  class  occurs  only  once  a  month  (at  the  end  of  the  month) 
instead  of  every  fortnight. 

The  first  day  of  the  settlement  is  also  called  making-up  day 
for  the  reason  that  on  this  day  there  is  officially  fixed  for  each 
stock  a  price  at  which  settlements  shall  be  made  on  bargains 
(contracts)  that  are  to  be  continued  until  the  next  fortnightly 
settlement.  One  who  has  bought  stock  pays  to  his  broker  the 
difference  if  the  settlement  (making-up)  price  is  lower  than 
that  at  which  he  bought  or  he  receives  from  his  broker  the 
difference  if  the  settlement  price  is  higher  than  the  price  at 
which  he  bought.  Conversely,  one  who  has  sold  stock  pays  to 
his  broker  the  dift'erence  if  the  making-up  price  is  higher  than 


SMITH'S  FINANCIAL  DICTIONARY.  471 

that  at  which  he  sold  or  he  receives  from  his  broker  the  differ- 
ence if  the  settlement  price  is  lower  than  that  at  which  he  sold. 

If  the  buyer,  who  is  bull  (long),  wishes  to  defer  receipt  of  the 
stock  until  the  next  settlement  he  agrees  to  pay  for  this  exten- 
sion and  this  payment  is  called  contango.  The  term  applies 
whether  he  secures  the  consent  of  the  seller  to  carry  the  stock 
or  makes  an  arrangement  with  some  one  else  in  the  exchange 
to  carry  it.  In  New  York  this  would  be  called  interest  or  car- 
rying charge. 

If  the  seller,  who  is  bear  (short),  wishes  to  defer  delivery  to 
the  next  settlement  he  generally  receives  the  contango ;  but  if 
the  stock  is  oversold  and  scarce  he  has  to  pay  what  is  called 
backwardation.  In  New  York  backwardation  would  be  called 
premium.  When  a  contract  continues  without  charges  either 
way  it  is  said  to  be  even. 

Account  days,  as  distinguislied  from  account  day  or  pay  day, 
the  last  day  of  the  settlement,  are  the  four  days  occupied  in  the 
settlement  considered  collectively. 

Settlement  day.  Same  as  account  day  or  pay  day ;  the 
fourth  and  last  day  of  the  settlement  (see  Settlement,  The)  on 
the  London  Stock  Exchange,  when  money  payments  have  to 
be  made  in  accordance  with  the  terms  of  contracts. 

Settling  clerk.  The  name  in  New  York  for  the  clerk  in  a 
bank  who  conducts  its  clearings  at  the  clearing  house ;  see 
Clearing  house  of  the  associated  banks  of  New  York. 

Settling  price.  The  arbitrary  price  at  which  a  settlement 
of  a  contract  is  made.  For  information  as  to  the  fixing  of  the 
settling  price  in  stocks  see  New  York  Stock  Exchange  clearing 
house. 

SF.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  sinking  fund,  as  sinking  fund  bonds. 

Shaking  down  the  market,  A  Wall  Street  term,  meaning 
manipulation  of  the  market  so  as  to  effect  a  lower  range  of 
prices. 

Shaking  out  stocks.  A  Wall  Street  term,  meaning  manipu- 
lation of  the  market  so  as  to  compel  the  sale  of  stocks  by 
holders. 

Share.  As  applied  to  stocks  the  term  means  one  of  the 
equal  parts  into  which  the  capital  stock  of  a  company  is 
divided. 


472  SMITH'S  FINANCIAL  DICTIONARY. 

In  Great  Britain  stocks  and  shares  are  different  forms  into 
which  the  capital  of  companies  may  be  divided.  Shares  are  of 
£  I  or  £2  or  any  other  denomination  up  to  £1,000;  but  the 
most  usual  denominations  are  £1,  £5  and  £10.  The  distinc- 
tion between  shares  and  stock  lies  in  the  fact  that  shares  are 
indivisible.  Any  number  of  shares  may  be  transferred  but  no 
single  share  can  be  divided ;  and  shares  are  quoted  at  so  much 
per  share.  Stock  can  be  divided  and  dealt  in,  in  some  cases, 
in  pennyworths.  For  instance,  it  is  possible  to  transfer,  say, 
£3.  IIS.  9d.  consols;  but  usually  stock  is  transferred  only  in 
multiples  of  £  i  and  stock  is  quoted  and  dealt  in  at  so  much 
per  cent.  A  share  certificate  is  a  certificate  of  a  share  or  shares ; 
a  stock  certificate  is  a  certificate  of  so  much  stock. 

The  securities  issued  by  a  government  are  generally  desig- 
nated as  bonds  instead  of  stock.  The  securities  issued  by  the 
United  States  government  are  designated  as  bonds,  although 
formerly  known  as  stock.  Some  of  the  securities  issued  by  the 
city  of  New  York  are  designated  as  stock ;  but  municipalities 
as  a  rule  designate  their  securities  as  bonds  instead  of  stock. 

For  additional  information  see  Stock. 

Share  broker.  One  who  deals  in  shares  of  stock.  This  term 
is  not  in  common  use ;  the  term  usually  employed  is  stock 
broker. 

Shareholder.     A  holder  of  shares  of  stock. 

Sharp  cash.     Prompt  cash. 

Shave.  An  extra  discount ;  a  premium  in  addition  to  the 
rate  of  interest  allowed  by  law. 

If  a  borrower  receives  $5,000  and  gives  his  note  for  $6,000, 
with  interest,  the  difference  of  $1,000  is  a  shave.  To  buy  a  note 
or  other  paper  at  a  greater  reduction  than  the  amount  of  the 
legal  rate  of  interest  is  to  shave  it. 

Shearing  a  lamb.  A  colloquialism,  meaning  to  take  away 
the  money  of  one  inexperienced  in  speculation. 

Shekel,  The  shekel  of  the  ancient  Hebrews  was  a  weight. 
The  term  shekel  is  now  used,  colloquially,  to  signify  money. 
When  it  is  said  that  a  person  has  shekels  it  is  meant  that  he 
has  money. 

Sherman  act.  The  act  of  July  14,  1890,  which  ordered  the 
purchase  each  month  by  the  Secretary  of  the  Treasury  of  4,- 
500,000  ounces  of  silver  bullion,  or  so  much  thereof  as  might  be 


SMITH'S  FINANCIAL  DICTIONARY.  473 

offered  at  the  market  price,  provided  the  market  price  did  not 
exceed  the  coinage  value,  $1.29.29  an  ounce.  To  pay  for  the 
silver  so  purchased  an  issue  of  Treasury  notes  redeemable  in 
coin  was  authorized.  There  was  also  a  clause  in  the  act  repeal- 
ing the  purchasing  clause  of  the  Bland-Allison  act  of  1878  and 
providing  for  the  coining  of  2,000,000  ounces  of  silver  per 
month  until  July  i,  1891,  when  coinage  should  cease,  except 
when  necessary  to  supply  silver  dollars  for  the  redemption  of 
the  Treasury  notes.  All  the  remaining  bullion  and  that  bought 
thereafter  was  to  be  held  in  the  Treasury  as  security  for  the 
notes.     Seigniorage  was  to  accrue  to  the  Treasury. 

The  purchasing  clause  in  the  act  was  repealed  November  i, 
1893,  it  having  been  found  that  the  government  purchases  of 
silver  not  only  failed  to  accomplish  the  result  hoped  for,  viz., 
the  maintenance  of  the  price  of  silver  at  the  coining  parity — 
$1.29.29  an  ounce — but  that  silver  was  declining  so  rapidly  in 
value  as  to  threaten  both  impairment  of  the  security  it  offered 
as  backing  for  the  notes  and  an  entire  upsetting  of  the  mone- 
tary stability  of  the  country.  A  severe  business  panic  had  been 
brought  about,  complicated  by  political  considerations  in 
which  the  tariff  also  figured.  Before  the  repeal  the  notes  issued 
under  authority  of  the  act  were  reissued  after  redemption. 
Since  1893  they  have  been  canceled  when  redeemed  in  silver 
and  the  bullion  so  released  has  been  coined,  gradually  reduc- 
ing the  Treasury's  holdings  of  bullion.  The  seigniorage  also  is 
coined  as  it  accrues. 

For  additional  information  see  Treasury  note. 

Shifting  loans.  When  banks  demand  the  payment  of  call 
loans  borrowers  are  obliged  to  pay  off  their  loans  and  renew 
them  with  other  banks.    This  process  is  called  shifting  loans. 

Shilling.  A  silver  coin  of  Great  Britain  which  is  worth  12 
pence;  the  twentieth  part  of  one  pound  sterling;  equal  to  24.3 
cents. 

The  term  shilling  is  a  common  one  in  the  United  States 
where  it  means  not  a  coin  but  an  amount,  12  1-2  cents. 

Shinning.  A  phrase  applied  to  the  efforts  of  a  borrower 
to  raise  money  when  his  credit  is  so  poor  that  he  has  to  visit 
many  lenders  before  he  succeeds. 

Shinplaster.  A  colloquial  name  for  the  fractional  paper  cur- 
rency issued  by  the  government  during  the  Civil  War  to  serve 


474  SMITH'S  FINAXCL^IL  DICTIONARY. 

as  small  change  during  the  suspension  of  specie  payments. 
The  shinplaster  was  fiat  money ;  it  is  out  of  circulation; 

Shoestring.  A  colloquialism ;  when  a  speculator  in  stocks, 
for  instance,  begins  with  a  small  sum  and  concludes  his  opera- 
tions with  a  large  profit  he  is  said  to  have  started  on  a  shoe- 
string. The  expression  is  sometimes  amplified  by  saying  that 
the  speculator  ran  a  shoestring  up  to  a  tannery  or  started  on 
a  shoestring  and  ran  it  up  to  a  tannery. 

Shop.  London  Stock  Exchange  term  for  the  inside  in- 
terests which  control  a  concern  and  are  well  informed  as  to  its 
status  and  prospects.  "Selling  for  the  shop"  in  a  railway 
stock  would  mean  selling  by  the  directors  or  oflficials  and 
would  imply  that  the  inside  interests  had  reasons  for  getting 
out. 

Short.  One  who  has  sold  a  stock  which  he  does  not  possess 
and  has  borrowed  the  stock  for  delivery  to  the  buyer  is  short 
of  that  stock.  One  who  is  short  of  several  stocks  is  said  to  be 
short  of  the  market.    One  who  is  short  is  a  bear. 

The  object  of  selling  short  is,  of  course,  to  repurchase  subse- 
quently at  a  lower  figure.  The  rules  of  the  New  York  Stock 
Exchange  enforce  the  completion  of  each  transaction  entered 
into  "regular  way"  on  the  day  following  the  transaction. 
Hence,  the  speculator  who  has  sold  short  is  forced  to  borrow 
the  stock  he  has  sold  but  does  not  own  and  make  actual  de- 
livery of  it  next  day  to  the  purchaser.  This  he  accom- 
plishes through  his  broker  by  paying  the  market  value  of  the 
stock  to  the  one  from  whom  he  borrowed  it  and  then  returning 
the  borrowed  stock  to  the  lender  when  he  has  covered,  or  in 
other  words,  bought  back  the  stock. 

For  additional  information  see  Borrowing  and  lending 
stocks. 

When  a  speculator  is  short  of  stock  (has  sold  stock  which  he 
did  not  own)  on  which  a  dividend  becomes  due  he  has  to  pay 
the  amount  of  the  dividend  to  the  person  from  whom  he  bor- 
rowed the  stock  to  make  delivery  to  the  one  to  whom  he  sold 
stock. 

In  speculation  in  grain,  cotton,  coiTee  and  other  commodities 
contracts  to  receive  and  deliver  the  property  are  entered  into 
the  same  as  in  stocks. 


SMITH'S  FINANCIAL  DICTIONARY.  475 

On  the  London  Stock  Exchange  it  is  the  custom  to  say  that 
a  speculator  is  bear  of  stocks  instead  of  short  of  stocks. 

Short  account.  A  term  applied  to  the  collective  short  (see 
Short)  sales  of  a  particular  stock  or  to  collective  short  sales 
of  stocks  in  general,  which  sales  are  in  expectation  of  a  decline 
in  the  price  of  the  particular  stock  or  in  the  prices  of  stocks 
in  general.  The  term  also  applies  to  corresponding  sales  of 
grain,  cotton,  cofifee,  etc. 

Short  bill.  Same  as  short-dated  bill ;  a  bill  of  exchange 
(draft)  having  a  short  time  to  run.  A  bill  running  for  30  days 
or  less  is  usually  termed  a  short  bill  or  short-dated  bill. 

Short  bit.  A  term  used  in  the  Southern  and  Western  states, 
meaning  10  cents.  It  is  derived  from  the  old  Spanish  real 
w^hich  used  to  circulate  in  those  states  and  was  called  a  bit 
and  was  worth  nominally  12  1-2  cents. 

Short-dated  bill.  Same  as  short  bill ;  a  bill  of  exchange  hav- 
ing a  short  time  to  run.  A  bill  running  for  30  days  or  less  is 
usually  termed  a  short-dated  bill  or  short  bill. 

Short-dated  exchange.  Same  as  short  exchange ;  exchange 
(a  bill  of  exchange)  having  a  short  time  to  run.  Exchange 
running  for  30  days  or  less  is  usually  termed  short  exchange  or 
short-dated  exchange. 

Also  see  Short  of  exchange. 

Shorter's  court.  A  place  contiguous  to  the  London  Stock 
Exchange  (from  which  there  is  an  entrance  to  the  exchange) 
where  curb  dealings  in  American  stocks  are  conducted  "after 
hours."  After  the  London  Stock  Exchange  closes  at  4  p.  m. 
(which  is  II  a.  m.  in  New  York)  the  business  in  American 
stocks  continues  "on  the  curb" — in  the  street  in  Shorter's  court. 

For  additional  information  see  Arbitrage. 

Short  exchange.  Same  as  short-dated  exchange ;  exchange 
(a  bill  of  exchange)  having  a  short  time  to  run.  Exchange 
running  for  30  days  or  less  is  usually  termed  short  exchange 
or  short-dated  exchange. 

Also  see  .Short  of  exchange. 

Short  haul.  A  railroad  term  signifying  transportation  (of 
freight)  for  a  short  distance  in  contradistinction  to  transporta- 
tion for  a  long  distance,  which  is  called  long  haul. 

Also  see  Long  and  short  haul  clause. 

Short  interest.     The  collective  speculative  sales  (short  sales 


476  SMITH'S  FINANCIAL  DICTIONARY. 

— see  Short)  of  a  particular  stock  or  of  stocks  in  general ;  the 
opposite  of  long  interest.  The  expression  "The  short  interest 
in  the  market,"  for  example,  signifies  the  aggregate  speculative 
short  sales  of  stocks  in  general. 

Short  loan  or  short  money.  London  money  market  term 
for  money  borrowed  for  a  day  or  so. 

Short  market.  An  oversold  market.  For  instance,  when 
more  stocks  have  been  sold  short  (sold  when  not  owned)  than 
can  be  bought  back  without  unduly  advancing  prices  the  mar- 
ket (for  stocks)  is  said  to  be  a  short  market. 

Short  notice.  Speculative  dealings  in  commodities  (grain, 
cotton,  coffee,  etc.)  are  in  certificates  (warehouse  receipts 
which  call  for  the  actual  property).  On  a  future  contract  (a 
contract  calling  for  delivery  of  the  commodity  in  a  specified 
future  month)  a  certain  number  (according  to  the  rules  of  an 
exchange)  of  days'  notice  (called  a  regular  notice)  must  be 
given  by  the  seller  to  the  buyer  of  his  intention  to  deliver  the 
commodity  (that  is,  the  certificate  representing  it)  and  collect 
payment  for  it.  This  is  when  the  future  was  sold  without 
special  conditions. 

When  a  future  is  sold  without  stipulation  to  the  contrary 
delivery  is  understood  as  being  at  the  option  (at  the  pleas- 
ure) of  the  seller  on  regular  notice  to  the  buyer  at  any  time  in 
the  month  in  which  the  commodity  becomes  cash  (is  deliver- 
able). In  a  future  at  buyer's  option  the  commodity  is  de- 
liverable on  regular  notice  by  the  buyer  to  the  seller. 

When  a  broker  buys  a  contract  (accepts  the  transfer  to  him- 
self of  the  contract)  upon  which  regular  notice  has  been  given, 
but  some  part  of  wdiich  notice  has  elapsed,  the  notice  has  be- 
come a  short  notice.  A  contract  with  a  short  notice  is  often 
worth  less  in  the  market  than  one  with  a  regular  notice. 

Short  of  exchange.  When  a  drawer  of  (foreign)  exchange 
has  issued  (sold)  exchange  against  merely  his  credit  with  the 
concerns  upon  which  he  has  drawn  or  in  excess  of  the  com- 
mercial or  other  bills  which  he  has  on  hand  to  use  in  covering 
(paying)  the  exchange  which  he  has  sold  he  is  short  of  ex- 
change. 

Short  of  sterling.  The  term  in  full  is  short  of  sterling  ex- 
change, but  it  is  almost  invariably  used  in  its  abbreviated  form. 
When  a  drawer  of  exchange  has  issued    (sold)   sterling  ex- 


SMITH'S  FINANCIAL  DICTIONARY.  477 

change  against  merely  the  drawer's  credit  wth  the' concerns 
upon  which  he  has  drawm  or  in  excess  of  the  commercial  or 
other  bills  which  he  has  on  hand  to  use  in  covering  (paying) 
the  exchange  he  has  sold  he  is  short  of  sterling  exchange. 

Short  ribs.  Short  ribs  of  pork ;  there  is  a  considerable  spec- 
ulation in  short  ribs. 

Short  selling.  In  Wall  Street  this  consists  in  selling  stocks 
not  owned  and  borrowing  them  for  immediate  delivery.  When 
finally  bought  in  (covered)  the  borrowed  stocks  are  returned. 
If  in  the  interval  between  selling  and  buying  the  stocks  have 
declined  the  trade  is  profitable ;  if  there  has  been  an  advance  it 
is  unprofitable. 

Short  term  or  short  time  bond.  One  maturing  in  a  short 
time. 

Short  ton.  Two  thousand  pounds ;  a  gross  or  long  ton  is 
2,240  pounds.     A  metric  ton  is  2,204.6  pounds. 

Shunting.  London  Stock  Exchange  term  for  transactions 
of  a  certain  kind  between  the  provincial  exchanges  and  Lon- 
don. If  a  Liverpool  broker  knows  from  the  telegrams  that  he 
receives  from  his  London  agent  that  he  can  sell  Erie  shares  at 
40  in  London,  and  finds  a  seller  in  Liverpool  at  39  7-8,  he  buys, 
and  telegraphs  to  London  to  resell  at  40.  Shunting  has  to  be 
conducted  smartly  or  the  margin  of  profit  ma}-  be  gone  before 
the  telegrams  have  got  through.  It  is  the  same  as  arbitrage, 
but  it  is  applied,  as  a  rule,  to  inland  operations  as  opposed  to 
transactions  between  London  and  New  York  or  the  Continent. 

Shut  for  dividend.  A  term  sometimes  used  in  England  for 
closed  for  a  dividend,  which  means  that  the  stock  transfer 
books  of  a  company  are  closed  pending  the  pa3'ment  of  a  divi- 
dend.    For  additional  information  see  Books  closed. 

Sight.  As  applied  to  a  bill  of  exchange  (draft)  this  term 
means  that  the  bill  is  to  be  paid  by  the  drawee  (the  one  upon 
whom  it  is  drawn)  on  presentation  to  him,  if  grace  is  not  al- 
lowed by  law  in  the  state  or  covmtry  where  the  drawee  resides ; 
if  grace  is  allowed  by  law  then  the  bill  is  payable  on  the  last 
day  of  grace  after  sight — after  presentation  to  and  acceptance 
by  the  draw^ee.  There  also  is  usance  on  bills  drawn  in  some 
countries ;  see  Usance. 

Check  exchange  means  sight  exchange ;  a  check  or  cheque 


47S  SMITH'S  FINANCIAL  DICTIONARY. 

(English  way  of  spelling  check)  is  payable  on  demand,  or  in 
other  words,  on  presentation. 

Sight  paper.  Paper  (promissory  notes  and  bills  of  ex- 
change) payable  on  demand  or  on  presentation. 

Signatory.  One  who  has  signed  the  articles  of  association 
or  incorporation  of  a  company. 

Signature.  A  name  as  written  by  the  person  to  whom  it  be- 
longs. In  assigning  stock  or  a  registered  bond  the  name 
must  be  written  precisely  as  it  appears  on  the  face  of  the  cer- 
tificate. 

Initials  signed  to  a  paper  with  the  intention  that  they  shall 
stand  as  a  signature  are  binding.  In  the  courts  of  New  York 
state  it  has  frequently  been  held  that  any  mark  made  with  this 
intention  was  a  sufficient  signature.  In  one  case  the  court 
held  that  "where  a  party  placed  the  figures  '1.2.8.'  upon  the 
back  of  a  bill  of  exchange  by  way  of  substitute  for  his  name,  in- 
tending thus  to  bind  himself  as  indorser,  it  was  a  valid  indorse- 
ment, though  it  appeared  he  could  write."  In  another  case 
the  signature  was  by  initials  and  the  court  said :  "A  party 
signing  a  written  instrument  with  his  initials,  intending  there- 
by to  bind  himself,  is  as  effectually  bound  as  he  would  be  by 
writing  his  name  in  full." 

Signature  book.  The  book  in  a  bank  which  contains  the 
signatures  of  depositors.  Most  banks  now  keep  the  signatures 
of  depositors  on  cards. 

Signature  card.  A  card  bearing  the  signature  of  a  depositor 
of  a  bank  and  kept  on  file  in  the  bank  for  reference.  Some 
banks  keep  the  signatures  of  depositors  in  a  special  book. 

Signature  mark.  A  mark  serving  as  a  signature.  For  addi- 
tional information  see  Signing  by  mark. 

Signed  in  blank.  A  certificate  of  stock  or  a  registered  bond 
signed  on  the  back  and  witnessed,  but  with  the  space  for  the 
name  of  the  new  owner  left  blank.  The  correct  term  is  as- 
signed in  blank  ;  see  Assigned  in  blank. 

Signing  by  mark.  Signing  by  the  sign  X  which  is  the  mark 
used  when  the  signature  of  an  illiterate  or  physically  incapaci- 
tated person  is  required. 

The  name  is  written  by  some  one  else  like  this :  John  X  Doe. 
Then  above  the  X  is  written  "His"  and  below  it  is  written 
"mark."     The  illiterate  person,  if  able,  makes  the  mark  ;  in  case 


SMITH'S  FINANCIAL  DICTIONARY.  479 

of  physical  incapacity  the  mark  is  made  for  the  signer,  whose 
fingers  are  pressed  upon  the  penholder  while  the  point  of  the 
pen  rests  upon  the  X.  A  signature  by  mark  is  usually  required 
to  be  verified  by  the  signatures  of  two  witnesses. 

Signing  in  liquidation.  The  act  of  signing  for  a  firm  by  that 
mendjer  of  it  who  has  charge  of  the  winding  up  of  its  affairs. 

Sign  manual.     The  signature  of  a  person  in  his  own  hand. 

SIL.  i\s  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  silver.  On  the  New  York  Stock  Exchange  silver  is 
bought  and  sold  at  so  much  per  ounce  and  the  dealings  are  in 
lots  of  1,000  ounces  of  fine  (pure)  silver.  Not  the  actual  silver 
is  dealt  in  but  certificates  which  represent  silver  in  storage. 

Silent  partner.  Same  as  sleeping  partner;  one  not  openly 
and  generally  declared  to  be  a  partner. 

Silver  bar.  Means,  in  bullion  dealings,  a  bar  (ingot)  of  pure 
silver.  A  bar  manufactured  and  assayed  by  the  government  is 
called  a  government  bar  or  government  assay  bar;  a  bar  man- 
ufactured and  assayed  by  a  private  concern  is  called  a  com- 
mercial bar.    See  Silver  bullion. 

Silver  basis.  Exists  when  values  are  based  on  silver  money. 
The  value  of  silver  money  depends  on  the  commercial  price  of 
silver  bullion  and  this  price  is  regulated  by  supply  and  de- 
mand the  same  as  the  price  of  any  commodity. 

Silver  bullion.  London  is  the  recognized  silver  bullion  mar- 
ket of  the  world.  The  London  price  is  given  (quoted)  in 
pence  (instead  of  shillings  and  pence)  per  ounce  for  silver  in 
bars  or  ingots  of  the  British  government  standard,  which  is 
.925  fine  (925-1.000  pure  silver  and  75-1,000  alloy).  In  the 
United  States  the  price  is  given  (quoted)  in  cents  per  ounce 
for  fine  (pure)  silver. 

In  New  York  quotations  a  double  price  is  given,  as  for  ex- 
ample, 64@65  cents.  The  first  price,  64  cents,  is  the  bid  price 
or  the  price  which  is  offered  by  a  bullion  dealer  for  bars.  The 
second  price,  65  cents,  is  the  asked  price  or  the  price  which 
the  bullion  dealer  asks  for  bars. 

In  New  York,  as  in  other  markets  in  the  LTnited  States,  quo- 
tations are  given  for  commercial  bars  and  for  government 
assay  bars.  The  prices  for  government  bars,  which  are  manu- 
factured and  assayed  in  assay  offices  belonging  to  the  govern- 
ment, are  a  little  higher  than  those  for  commercial  bars,  which 


48o  SMITH'S  FINANCIAL  DICTIONARY. 

are  produced  by  private  smelters.  Government  bars  may  be 
no  better  than  commercial  bars,  but  the  government  stamp 
imparts  an  additional  market  value  to  them. 

On  the  New  York  Stock  Exchange  silver  bullion  is  bought 
and  sold  at  so  much  per  ounce  and  the  dealings  are  in  lots  of 
I, GOG  ounces  of  fine  (pure)  silver.  Not  the  actual  silver  is 
dealt  in  but  certificates  which  represent  silver  in  storage. 

Silver  certificate.  A  certificate  issued  against  a  correspond- 
ing number  of  silver  dollars  held  in  the  Treasury. 

Silver  certificates  are  in  denominations  of  $i,  $2,  $5,  $10,  $2g, 
$50,  $100,  $500,  $i,GGo.  The  issue  of  them  is  limited  to  the 
number  of  silver  dollars  deposited  in  the  Treasury.  They  are 
exchangeable  at  the  Treasury  for  silver  dollars  or  smaller 
coins. 

Silver  certificates  are  not  legal  tender,  but  are  receivable  for 
customs,  taxes  and  all  public  dues  and  when  so  received  may 
be  reissued ;  they  are  also  available  for  the  reserves  of  national 
banks.  Silver  certificates  are  in  efifect  merely  warehouse  cer- 
tificates. 

Silver  coins.  Dollar — weight,  412.5  grains ;  thickness,  .08 
inch;  diameter,  1.5  inches.  Half-dollar — weight,  192.9  grains; 
thickness,  .057  incli ;  diameter,  1.2  inches.  Quarter-dollar — 
weight,  96.45  grains;  thickness,  .045  inch;  diameter,  .95  inch. 
Dime — weight,  38.58  grains ;  thickness,  .032  inch  ;  diameter,  .7 
inch. 

Silver  discount.  The  amount  less  than  a  dollar  that  a  dollar 
in  silver  brings  when  paid  for  in  gold. 

If  IGO  gold  dollars  cost  20G  silver  dollars  silver  money  is 
at  a  discount  of  50  per  cent  while  gold  money  is  at  a  premium 
of  100  per  cent. 

Silver  dollar.  Weighs  412  1-2  grains,  is  .g8  of  an  inch  thick 
and  its  diameter  is  1.5  inches. 

There  are  480  grains  in  a  troy  ounce  ;  a  silver  dollar  contains 
371.25  grains  of  fine  (pure)  silver,  the  remainder  of  the  weight 
of  the  coin  being  41.25  grains  of  copper,  the  total  weight  of  the 
coin  being  412.5  grains.  To  ascertain  the  commercial  (mar- 
ket) value  of  the  silver  in  a  silver  dollar  multiply  the  commer- 
cial price  of  fine  silver  by  371.25  and  divide  the  result  by  480. 

To  make  the  metal  value  of  the  silver  in  a  silver  dollar  worth 


SMITH'S  FINANCIAL  DICTIONARY.  481 

100  cents  the  commercial  or  market  price  of  silver  must  be 
$1.29.29  per  ounce. 

Silver  exports.  Silver  having  no  fixed  value  is  exported 
under  the  same  general  conditions  as  grain,  cotton  or  any- 
other  commodity. 

Silver  prices  or  quotations.     See  Silver  bullion. 

Silver-purchase  act.  Another  name  for  the  Sherman  act, 
which  see. 

Silver  standard.  The  silver  standard  exists  in  countries 
where  it  is  by  law  enacted  that  silver  shall  be  the  measure  of 
value.  At  the  present  time  China,  the  Far  East  in  general 
and  some  of  the  countries  of  South  America  and  of  East- 
ern Europe  adhere  to  that  standard.  Their  domestic  trade  is 
regulated  by  silver  accepted  at  its  bullion  value,  but  all  trans- 
actions with  the  rest  of  the  world  are  based  on  gold  and  in 
the  end  the  value  of  silver  is  regulated  by  these  outside  trans- 
actions. 

Silver  value.     See  Silver  bullion. 

Simoleon.  A  colloquial  name  occasionally  applied  to  the 
dollar.  To  say  that  one  has  simoleons  is  equivalent  to  say- 
ing that  he  has  the  dollars. 

Simple  arbitration  of  exchange.  A  calculation  based  on 
rates  of  exchange  between  three  places  to  determine  the  dif- 
ference in  the  money  market  rates  of  the  three  places  or  a 
calculation  based  on  the  money  market  rates  of  three  places 
to  determine  the  ratio  of  exchange  between  the  three  places. 
When  more  than  three  places  are  involved  in  the  calculation 
it  is  called  compound  arbitration  of  exchange. 

For  additional  information  see  Arbitration  of  exchange. 

Simple  contract.  An  oral  contract  or  a  written  contract 
not  under  seal,  which  re([uires  a  consideration  to  bind  (sup- 
port) it. 

Simple  interest.  Interest  computed  on  the  principal  alone 
and  not  added  to  the  principal  to  bear  interest  also  as  is  the 
case  in  compound  interest. 

Single-entry.  In  single-entry  bookkeeping  the  day-book  (a 
day-book  and  journal  kept  as  one)  and  the  ledger  are  the  es- 
sential books. 

Single-name  paper.  Paper  without  indorsement ;  bearing 
only  the  name  c^f  tlic  maker.     Another  designation  for  single- 


482  SMITH'S  FINANCIAL  DICTIONARY. 

name  paper  is  straight  paper ;  in  fact  it  is  a  common  practise 
to  speak  of  paper  without  indorsement  as  straight  paper. 

Single  option.  London  Stock  Exchange  designation  for  a 
call  or  a  put. 

Also  see  Double  option. 

Single  standard.  Exists  where  either  gold  or  silver  is  by 
law  the  basis  of  value,  but  not  both. 

Sinking  fund.  A  fund  to  which  are  contributed  amounts 
of  money  at  specified  times  for  the  redemption  of  a  debt.  For 
instance,  when  a  sinking  fund  is  established  for  the  redemp- 
tion of  an  issue  of  bonds  a  certain  amount  of  money  is  added 
to  the  fund  each  year  (or  at  other  stated  intervals)  until  finally 
the  fund  amounts  to  enough  to  redeem   (pay  ofif)   the  bonds. 

Sometimes  the  money  paid  into  a  sinking  fund  is  invested 
in  other  bonds  (or  other  securities)  the  interest  payments 
(or  dividends)  received  from  which  help  to  swell  the  sinking 
fund.  It  is  not  infrequently  the  case  that  a  sinking  fund  is 
established  to  redeem  drawn  bonds ;  see  Drawn  bond. 

Sinking  fund  bond.  A  bond  provision  for  the  payment  of 
the  principal  of  which  is  made  by  the  creation  of  a  sinking 
fund;  see  Sinking  fund. 

Sinking  fund  mortgage.  A  mortgage  for  the  payment  of 
which  a  sinking  fund  has  been  established ;  see  Sinking  fund. 

Sixteen-to-one.  This  term  refers  to  the  ratio  between  gold 
and  silver  in  the  coinage  of  the  United  States.  The  exact 
ratio  is  15.988  to  i,  but  this  is  so  close  to  16  to  i  as  practically 
to  make  one  ounce  of  gold  equal  to  sixteen  ounces  of  silver  in 
coining. 

Sixty.  A  bill  of  exchange  payable  in  sixty  days  is  often 
called  a  sixty;  plural,  sixties. 

Slaughtering.  As  a  Wall  Street  colloquialism  this  term 
means  selling  at  a  sacrifice  in  value. 

SLD.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters  mean  sold.  When  a  sale  that  has  been  made  on  the 
New  York  Stock  Exchange  is  not  recorded  (printed)  in  its 
proper  place  (in  its  regular  order)  the  price  is  preceded  by 
the  abbreviation  SLD.,  thus:  RG.  SLD.  75,  meaning  that 
Reading  stock  sold  at  75. 

Sleeping  account.  A  trade  term,  meaning  an  unsettled  ac- 
count of  loncf  standincf. 


SMITH'S  FINANCIAL  DICTIONARY.  4S3 


Sleeping  partner.  Same  as  silent  partner ;  one  not  openly 
and  generally  declared  to  be  a  partner. 

Slow  account.  Same  as  inactive  account ;  an  account  to 
which  debits  and  credits  are  not  frequently  added. 

A  slow  account  in  a  bank  is  one  which  is  not  frequently 
augmented  by  deposits  and  likewise  is  not  frequently  dimin- 
ished by  drafts  upon  (by  checks  drawn  against)  it. 

A  slow  speculative  account  (as  in  stocks,  grain,  cotton  or 
coffee,  etc)  is  one  where  the  speculator  does  not  buy  and  sell 
with  frequency. 

Slow  assets.  Property  applicable  to  the  payment  of  debts 
which  cannot  promptly  be  converted  into  cash,  but  which 
must  be  held  for  a  time  in  order  to  dispose  of  it  advantageous- 
ly or  without  sacrifice. 

Slug.  Colloquial  name  for  an  octagonal  gold  piece  of  the 
value  of  $50  formerly  minted  by  the  government. 

Small  bond.  A  name  applied  to  a  bond  for  a  smaller 
amount  than  $500.  As  a  rule  a  small  bond  sells  at  a  lower 
price  than  a  bond  for  $1,000  (the  usual  amount)  or  even  a 
bond  for  $500.  Large  bond  is  the  name  applied  to  a  bond  for  a 
larger  amount  than  $1,000. 

Small  change.  Subsidiary  silver  coins  (half-dollar,  quar- 
ter-dollar and  dime  or  lo-cent  piece)  and  minor  coins  (5-cent 
nickel  and  i-cent  bronze). 

Smart  money.  A  term  applied  to  money  paid  for  release 
from  an  agreement. 

Snap  judgment.  A  judgment  taken  prematurely,  irregularly 
or  without  due  notification. 

Soft  coal.  A  common  name  for  bituminous  coal ;  see  Bi- 
tuminous coal. 

Soft  money.  A  colloquial  name  for  paper  money  as  dis- 
tinguished from  hard  money  (coin). 

Soft  spot.  Wall  Street  designation  for  a  stock  or  group 
of  stocks  displaying  weakness  in  an  otherwise  generally  strong 
market. 

Sola.  A  term  applied  to  a  foreign  bill  of  exchange  when 
drawn  singly — that  is,  when  no  copy  of  the  bill  is  made.  When 
drawn  in  duplicate    or  triplicate    each  bill  is  called  a  via. 

Sold.  When  a  quotation  for  a  stock  appears  on  the  tape 
accompanied  by   the  letters   SLD    (sold)    it   means  that  the 


f.84  SMITH'S  FINANCIAL  DICTIONARY. 

Stock  sold  at  the  price  named,  but  that  the  quotation  does  not 
appear  on  the  tape  in  its  regular  order,  the  sale  having  been 
made  previously. 

Sold  bill.  A  bill  of  exchange  sold  short ;  a  time  bill  (bill 
payable  at  a  future  specified  time)  which  the  drawer  has  sold 
and  to  meet  which  he  must  at  its  maturity  deliver  a  demand 
bill  (bill  payable  on  presentation),  or  perhaps  cash,  to  the 
drawee  (the  one  who  is  to  pay  the  sold  bill). 

Sold  note.  A  memorandum  of  sale  delivered  by  a  mer- 
chandise broker  to  the  seller  of  goods  for  whom  the  broker 
acted. 

Sold  on  order.  A  term  applied  to  goods  for  which  an  order 
has  been  received  by  the  seller  and  which  have  not  yet  been 
delivered   or  which  are  to  be  delivered  in  the  future. 

For  instance,  a  wholesale  dealer  may  sell  on  order  goods  yet 
to  be  received  by  him ;  or  a  mill  manufacturing  woolen  goods 
or  cotton  goods  may  sell  on  order  its  output  for  three  months 
(for  three  months  ahead) — in  other  words,  it  may  sell  goods 
not  yet  produced  the  production  of  which  will  take  three 
months. 

Sold  out.     See  Selling  out. 

Sou  marquee,  A  colloquialism,  meaning  of  little  value,  as 
not  worth  a  sou  marquee.  The  term  is  derived  from  the 
French  sou  marque,  an  old  copper  coin  worth  15  deniers, 
equal  to  i  1-4  cents. 

South  Sea  bubble.  The  South  Sea  Company  was  projected 
(organized)  in  1710  by  the  Prime  INiinister  of  England,  Har- 
ley,  afterward  Earl  of  Oxford,  to  efifect  a  reduction  of  the  in- 
terest on  the  funded  debt.  By  1720  the  necessities  of  the 
nation  had  increased  to  such  an  extent  that  the  plan  of  the 
South  Sea  Company  was  accepted  by  the  government.  This 
plan  provided  for  the  uniting  or  consolidation  of  the  debts  of 
the  state  upon  which  the  state  was  to  pay  5  per  cent  until 
1727  and  4  per  cent  thereafter.  The  South  Sea  Company  was 
to  receive  a  valual:)le  monopoly  for  its  services,  to  wit :  the 
exclusive  privilege  of  trading  to  the  Pacific  ocean  and  along 
the  east  coast  of  America  from  the  Orinoco  to  Cape  Horn. 

The  company's  method  of  consolidating  the  English  gov- 
ernment debts  was  by  ofifering  its  own  stock  in  exchange  for 
the  securities  representing  the  delfts.     The  South  Sea  Com- 


SMITH'S  FINANCIAL  DICTIONARY.  4S5 

pany's  offer  was  considered  so  advantageous  that  the  holders 
of  government  securities,  or  annuities,  as  they  were  commonly 
called,  rushed  to  cmljracc  it.  These  holders  thought  that  by 
exchanging  their  securities  for  South  Sea  shares  they  would 
receive  an  annuity  of  10  per  cent  instead  of  5  per  cent. 

The  par  value  of  the  shares  of  the  South  Sea  Company 
was  £100.  By  the  middle  of  1720  they  had  risen  to  £1,000. 
The  apparent  success  of  the  South  Sea  Company  inspired 
schemes  without  end.  The  objects  of  some  of  them  were  most 
absurd,  such  as  "for  the  discovery  of  perpetual  motion,"  "for 
the  fattening  of  hogs,"  "for  the  importation  of  jackasses,"  etc. 
There  were  instances  of  shares  reaching  a  premium  of  2,000 
per  cent.  One  projector  announced  a  "Company  for  carrying 
on  an  undertaking  of  great  advantage,  but  nobody  to  know 
what  it  is;  every  subscriber  who  deposits  £2  per  share  to 
be  entitled  to  £100  per  annum."  This  individual  in  five 
hours  received  subscriptions  to  the  amount  of  £2,000  and  the 
next  day  was  nowhere  to  be  found. 

The  companies  that  were  formed  after  the  organization  of 
the  South  Sea  Company  were  the  first  to  collapse,  but  the 
South  Sea  Company  burst  not  long  afterward.  The  loss  by 
its  failure  was  tremendous.  Thereafter  the  South  Sea  Com- 
pany was  known  as  the  South  Sea  bubble. 

Sovereign.  A  gold  coin  of  Great  Britain  worth  20  shill- 
ings or  £1  and  equal  to  $4.86.65. 

Special  account.  A  special  account  in  a  bank  is  one  created 
for  a  special  or  particular  purpose,  as  distinguished  from  a 
general  account,  which  is  an  account  to  which  credits  are 
added  and  against  which  checks  are  drawn  in  the  or/linary 
course. 

Special  agent.  A  person  authorized  to  act  for  another  in  a 
particular  matter  or  transaction. 

Special  aid  bond.  One  of  an  issue  in  aid  of  some  enterprise, 
as  a  railroad  or  manufacturing  concern,  which  is  expected  to 
benefit  the  nation,  state  or  municipality  which  issues  the 
bonds. 

Special  assessment  bond.  One  of  an  issue  of  municipal 
bonds  payable,  principal  and  interest,  from  special  taxes  levied 
upon  particular  property  for  an  improvement  from  which  this 
property  derives  special  benefit. 


486  SMITH'S  FINANCIAL  DICTIONARY. 

Special  carrier.  One  who  carries  persons  or  goods  only 
by  special  arrangement. 

Special  damages.  Loss  or  injury  sustained  in  addition  to 
that  proceeding  from  the  particular  act  complained  of. 

Special  deposit.  A  special  deposit  made  with  a  bank  is  a 
deposit  for  safe  keeping;  to  be  kept  as  received  in  the  vaults 
of  the  bank  until  called  for.  A  general  deposit  is  a  deposit  re- 
ceived and  pl§iced  with  the  funds  of  the  bank  to  be  loaned  to 
customers  and  used  in  the  general  business  with  other  funds 
of  the  bank. 

Special  depository.  A  bank,  trust  company  or  other  insti- 
tution legally  designated  to  receive  special  and  particular  de- 
posits of  trust  funds  or  public  funds.  The  institution  usually 
is  required  to  provide  a  bond  or  other  security  for  the  safe- 
keeping and  return  of  the  funds ;  usually,  also,  it  is  required  to 
pay  interest  on  these  funds — sometimes  at  a  rate  fixed  by  law. 

Special  indorsement.  Same  as  indorsement  in  full ;  an  in- 
dorsement on  a  check,  draft,  promissory  note  or  other  negoti- 
able instrument  or  paper  which  transfers  the  instrument  spe- 
cifically to  a  new  holder — that  is,  the  payee  (the  holder 
or  owner)  formally  makes  over  the  paper  in  writing  on  the 
back  to  another  whose  name  is  given.  Then  the  paper  is  pay- 
able only  to  the  one  to  whom  it  has  been  explicitly  transferred 
and  not  to  any  one  who  may  chance  to  have  possession  of  it. 

Specialist.  On  the  New  York  Stock  Exchange  a  specialist 
is  a  broker  who  confines  his  attention  to  one  or  to  a  very  few 
stocks ;  he  is  a  specialist  in  the  one  stock  in  particular  or  in 
the  few  stocks  to  which  he  may  devote  his  attention. 

Special  partner.  A  special  partner  is  one  who  contributes 
to  the  capital  of  a  firm  but  takes  no  part  in  the  conduct  of  the 
business. 

In  New  York  state  a  special  partner  is  liable  for  the  obli- 
gations of  the  firm  only  to  the  amount  contributed  by  him. 
He  may  receive  interest  on  his  contribution  at  the  legal  rate 
if  such  interest  does  not  reduce  the  original  amount  of  the 
capital.  If  after  the  payment  of  interest  a  profit  remains  he 
may  receive  his  pcjrtion  of  it.  If  a  special  partner  participates 
in  or  interferes  in  the  management  of  the  business  he  becomes 
li.'iblc  as  a  general  partner. 


SMITH'S  FINANCIAL  DICTIONARY.  487 

Special  power  of  attorney.  Written  authority  to  act  for  an- 
other in  a  specific  act   and  not  extending  beyond  that  act. 

Special  settlement.  London  Stock  Exchange  term ;  when 
new  securities  are  issued  the  issuers  apply  to  the  committee  of 
the  stock  exchange  for  a  special  settlement  in  them  ;  the  com- 
mittee, if  it  grants  the  settlement,  fixes  its  date. 

Specie,  Metallic  money,  ])ut  generally  construed  as  gold 
and  silver  money. 

Specie  payment.  A  payment  in  metallic  money,  but  gen- 
erally construed  as  meaning  gold  or  silver  money. 

Also  see  Resumption  act  of  1875. 

Specie  point.  This  is  a  term  used  in  foreign  exchange  deal- 
ings;  it  means  the  same  as  gold  point,  but  gold  point  is  the 
term  more  commonly  used.  Literally,  specie  means  any  kind 
of  metal  money,  while  there  is  but  one  meaning  to  gold. 

Speculating  for  differences.  London  Stock  Exchange  term  ; 
said  when  a  person  buys  or  sells  a  stock  merely  in  the  hope 
of  earning  a  gambling  profit  and  not  because  he  wishes  to  in- 
vest in  it  or  deliver  it. 

Speculation.  Dealing  on  expectations ;  buying  in  expecta- 
tion of  an  advance   or  selling  in  expectation  of  a  decline. 

There  is  a  constant,  large  speculation  in  stocks,  bonds,  grain, 
cotton  and  cofifee.  Speculative  operations  are  conducted  on 
margin — that  is,  speculators  deposit  with  the  brokers  who  ex- 
ecute their  orders  certain  amounts  of  money,  designated  as 
margins,  which  are  intended  to  protect  the  brokers  in  case 
the  movement  of  prices  should  be  against  the  speculators  and 
they  (the  speculators)  should  be  unwilling  or  unable  to  make 
good  the  loss  sustained.  A  party  who  purchases  a  stock  or 
a  commodity  in  anticipation  of  a  rise  and  pays  the  full  price 
of  it  is  not,  in  the  usual  acceptation,  engaged  in  speculation. 

The  customary  margin  furnished  in  a  transaction  in  a  stock 
is  10  per  cent  of  the  par  (face)  value  of  the  stock  dealt  in — 
not  the  market  value.  The  par  value  of  a  share  of  stock,  in 
dealings  as  conducted  on  the  New  York  Stock  Exchange,  is 
reckoned  by  percentage  (100  being  ]^ar),  no  matter  what  its 
amount  may  be  in  dollars.  A  margin  of  10  per  cent  on  100 
shares  of  a  stock  each  of  which  is  of  the  par  value  of  $100  is 


488  SMITH'S  FINANCIAL  DICTIONARY. 

$i,ooo;  on  loo  shares  of  stock  each  of  which  is  of  the  amount 
of  $50  the  margin  is  $500  and  on  100  shares  each  of  which 
is  of  the  amount  of  $25  the  margin  is  $250.  Most  shares  are 
for  $100  each  and  such  are  called  full  shares,  or  more  com- 
monly, full-stock.  Some  shares  are  for  $50  each  and  these  are 
called  half-stock.  A  few  shares  are  for  $25  each  and  these  are 
called  quarter-stock. 

When  the  speculator  puts  up  (provides)  10  per  cent  margin 
on  a  purchase  of  100  shares  of  stock  of  the  amount  of  $100 
each  the  broker  has  received  from  him  $1,000,  while  the  cost 
of  the  stock,  if  purchased  at  100,  is  $10,000.  The  difference  of 
$9,000  is  supplied  b}^  the  broker,  who  charges  the  speculator 
interest  on  this  sum.  If  the  stock  goes  up  and  is  sold  at,  say, 
105,  or  5  points  above  the  purchase  price,  the  speculator  has 
made  $500,  from  which,  however,  is  to  be  deducted  the  broker's 
commission,  as  well  as  the  interest  on  the  money  supplied  by 
the  broker  for  use  in  the  purchase  of  the  stock. 

Stock  bought  to  be  sold  again  (at,  it  is. expected,  a  price 
higher  than  that  at  which  it  was  purchased)  is  called  long 
stock.  Short  stock  is  stock  sold  when  not  owned.  It  is  sold  in 
the  expectation  that  it  can  be  bought  back  at  a  price  below 
the  selling  price.  Margin  on  short  stock  is  provided  the  same 
as  on  long  stock.  When  the  broker  sells  the  stock  he  has  to 
borrow  it  from  somebody  to  make  delivery  to  the  purchaser. 
When  the  stock  is  hnally  repurchased  it  is  used  in  making 
return  of  the  borrowed  stock.  (See  Borrowing  and  lending 
stocks).  If  the  stock  goes  down  and  is  bought  back  at,  say, 
5  points  below  the  selling  price  the  profit  is  $500  (on  100 
shares),  less  the  broker's  commission.  There  is,  as  a  rule,  no 
interest  charge  on  short  stock;  (for  explanation  see  Interest). 

The  broker's  commission  is  1-8  of  i  per  cent  on  the  par  value 
of  the  stock,  amounting  to  $12.50  for  buying  100  shares  of 
stock  and  the  same  for  selling,  thus  making  the  cost  of  a 
"turn"  in  100  shares  of  stock  $25.  A  dividend  paid  during  the 
])cndency  of  a  contract  goes  to  the  nominal  owner  of  the 
stock. 

.Stock  operations  ordinarily  carried  on  in  New  York  com- 
prise;  (i)  Buying  for  a  rise  or  going  long  of  stocks;  (2) 
selling  for  a  decline  or  going  short  of  stocks ;  (3)  buying  or 
selling  on  option  ;   (4)   buying  or  selling  priA'ilogcs,  known  as 


SMITH'S  FINANCIAL  DICTIONARY.  489 

puts,  calls,  spreads  and  straddles.  Pri\'ile.2^es  are  not  recog- 
nized by  the  New  York  Stock  Exchange. 

In  buying  for  a  rise  the  speculator  usually  deposits  $1,000 
with  his  broker  as  a  10  per  cent  "margin"  on  100  shares  of 
stock.  The  broker  holds  (carries)  the  stock  until  ordered  to 
sell  it  or  until  the  margin  is  nearly  exhausted.  In  the  latter 
case  if  the  speculator  on  request  fails  to  provide  more  mar- 
gin the  broker  is  at  liberty  to  sell  the  stock  immediately  and 
charge  the  speculator  with  the  loss,  if  any.  A  speculator  who 
has  bought  for  a  rise  is  said  to  be  long  and  he  is  a  "bull." 

Selling  for  a  decline  or  selling  short  is  the  opposite  of  buy- 
ing, except  that  the  seller,  not  having  the  stock,  is  obliged  to 
borrow  it  for  delivery  and  take  the  risk  of  buying  it  back  at 
a  future  dav  to  return  to  the  lender.  The  chief  risk  in  selling 
short  is  in  the  possibility  of  a  corner  in  the  stock  as  a  result 
of  which  the  price  may  be  forced  up  to  an  extraordinary  figure. 
Ordinarily  the  speculator  has  no  interest  to  pay  on  stock  sold 
short,  but  if  it  is  scarce  a  consideration  may  have  to  be  paid 
to  the  lender  for  its  use  from  day  to  day.  ]\rargins  and  com- 
missions are  the  same  as  in  the  case  of  stock  bought.  A  specu- 
lator who  has  sold  for  a  fall  is  said  to  be  short  and  he  is  a 
"bear." 

In  buying  or  selling  on  option  the  purchaser  or  the 
seller,  as  may  be  stipulated,  has  the  option  to  call 
for  or  to  tender  the  stock  at  the  price  named  at  any 
time  within  the  period  limited  by  the  contract.  The  New 
York  Stock  Exchange  does  not  recognize  such  contracts 
for  less  than  4  days  nor  for  more  than  60  days.  A  speculator 
anticipating  a  rise  in  a  stock  may  purchase  100  shares  buyer 
30,  which  gives  him  the  option  or  right  to  call  for  the  delivery 
of  the  stock  at  any  time  within  30  days  at  the  price  named, 
this  price  being  usually  somewhat  above  the  price  ruling  at  the 
time.  If  a  decline  in  a  stock  is  expected  a  sale  is  made  seller  30, 
or  at  the  seller's  option  to  deliver  at  any  time  within  30  days  at 
the  price  named,  the  price  being  usually  below  the  price  ruling 
at  the  time.  In  purchases  at  buyer's  option  the  buyer  is 
charged  \\ith  interest  on  the  price  of  the  stock  up  to  the  time 
he  calls  for  it.  In  sales  at  seller's  option  the  seller  is  credited 
with  interest  on  the  price  of  the  stock  until  he  delivers  it.     In- 


490  SMITH'S  FINANCIAL  DICTIONARY. 

terest  is  at  6  per  cent  and  at  the  end  of  the  optional  period  the 
seller  is  obliged  to  deliver  and  the  buyer  to  receive  the  stock  if 
the  contract  has  not  previously  been  closed.  Margins  and  com- 
missions are  the  same  on  stocks  bought  or  sold. 

Privileges,  or  puts,  calls,  spreads  and  straddles  are  con- 
tracts entitling  the  holder  to  receive  or  deliver  certain  stocks 
at  any  time  within  a  specified  period  (usually  30  or  60  days) 
and  at  a  specified  price.  In  a  spread  and  likewise  in  a 
straddle  the  privilege  is  either  to  receive  or  deliver.  A  cash 
price  is  paid  for  the  contract  by  the  purchaser  and  his  entire 
liability  is  limited  to  that  amount.  The  matter  of  interest  is 
not  involved  in  the  contract.  The  amount  paid  for  a  put  or  a 
call  is  generally  $100  on  100  shares  for  30  days  and  $150  to 
$200  for  60  days;  and  for  a  double  privilege  (a  spread  or  a 
straddle)  a  larger  amount. 

A  put,  which  entitles  the  holder  to  put  or  deliver  stock  to 
the  signer,  reads  as  follows : 

For  value  received,  the  bearer  may  deliver  me  one  hundred  shares  of 
the  stock  of  the  (name  of  company)  at  the  price  of  .  .  .  per  cent  any 
time  in  thirty  days  from  date.  The  undersigned  is  entitled  to  all  divi- 
dends declared  during  the  time. 

A  call,  which  entitles  the  holder  to  call  for  or  demand  stock 
from  the  signer,  reads  as  follows : 

For  value  received,  the  bearer  may  call  on  me  for  one  hundred  shares 
of  the  stock  of  the  (name. of  company)  at  the  price  of  .  .  .  per  cent  any 
time  in  thirty  days  from  date.  The  bearer  is  entitled  to  all  dividends  de- 
clared during  the  time. 

A  spread  entitles  the  holder  either  to  deliver  to  the  signer 
stock  at  one  price  or  to  demand  it  from  the  signer  at  an- 
other price.  If  the  price  named  in  both  cases  is  the  same  the 
contract  is  known  as  a  straddle.  Tlie  contract  reads  substan- 
tially as  follows : 

For  value  received,  the  bearer  may  call  on  the  undersigned  for  one 
hundred  shares  of  the  stock  of  the  (name  of  company)  at  .  .  .  per  cent 
any  time  in  thirty  days  from  date. 

Or,  the  bearer  may  put  or  deliver  the  same  stock  to  the  undersigned, 
at  .  .  .  per  cent  any  time  within  the  period  named.  All  dividends  de- 
clared during  the  lime  are  to  go  with  the  stock  in  either  case. 

The  purchaser  of  a  ]nit,  call,  spread  or  straddle  can  lose  only 
the  amount  paid  for  the  contract. 

When  a  broker  buys  stock  for  a  speculator  the  certificate 
is  not  made  out  in  the  name  of  the  speculator.     A  certificate 


SMITH'S  FINANCIAL  DICTIONARY.  49^ 

signed  (assigned)  in  blank  (see  Assigned  in  blank)  is  received 
by  the  buying  broker  from  the  selling  broker  and  this  certif- 
icate may  on  the  resale  of  the  stock  be  delivered  to  the  new 
buying  broker,  and  so  on,  the  same  certificate  continuing  to 
serve  indefinitely  in  transactions. 

Grain,  cotton,  coffee,  etc.,  are  bought  for  a  rise  or  sold 
short  for  a  fall  the  same  as  stocks.  Most  of  the  dealings  in 
these  commodities  are  in  futures,  by  which  is  meant  that 
when  a  purchase  is  made  the  property  is  to  be  received  in 
a  specified  future  month  or  when  a  sale  is  made  the  property 
is  to  be  delivered  in  a  specified  future  month. 

For  the  amounts  of  stocks,  bonds,  grain,  cotton,  coffee,  etc., 
usually  dealt  in  see  Regular  lot ;  for  margins  usually  required 
see  Margin,  and  for  commissions  charged  see  Commission. 

Speculative  business.  This  term  is  generally  construed  as 
meaning  transactions  on  margin.  For  additional  information 
see  Speculation. 

Speculative  investment  or  investment  speculation.  Is 
when  a  person  buys  outright  a  stock  or  a  bond,  primarily  to 
obtain  the  dividend  or  interest  paid  on  it,  but  also  with  the 
intention  of  selling  should  there  be  a  material  advance  in  the 
price  of  the  security. 

Likewise,  the  term  applies  when  a  person  buys  outright  a 
stock  that  is  not  paying  dividends,  but  which  the  buyer  ex- 
pects will  in  time  pay  dividends,  with  a  resultant  improvement 
in  the  price  of  the  stock ;  or  the  term  applies  when  a  person 
buys  outright  a  bond  that  is  not  paying  interest,  but  which 
the  buyer  expects  will  in  time  pay  interest,  with  a  result- 
ant improvement  in  the  price  of  the  bond. 

Speculative  investor.  One  who  buys  and  pays  in  full  for 
his  purchase  with  the  idea  of  selling  on  an  advance  rather  than 
holding  for  dividends  or  interest. 

Speculator.  One  who  deals  on  expectations ;  one  who  buys 
in  expectation  of  an  advance  or  sells  in  expectation  of  a  de- 
cline.    For  additional  information  see  Speculation. 

Spilling  stock.  A  Wall  Street  colloquialism,  meaning  to 
release  stock;  to  throw  it  on  the  market.  When  stocks  are 
disposed  of  from  necessity  they  are  spilled.  The  term  also  is 
used  when  stock  is  sold  to  break  down  prices  or  to  keep 
prices  from  advancing. 


492  SMITH'S  FINANCIAL  DICTIONARY. 

Split  coin.  A  term  applied  to  a  coin  (generally  a  gold  coin) 
which  has  been  cut  in  two  in  a  way  that  permits  a  portion  of 
the  metal  to  be  removed  from  the  interior  and  replaced  with 
a  base  metal,  after  which  the  two  parts  of  the  coin  are  joined 
and  the  coin  is  put  into  circulation  again. 

Split  order.  Designation  for  an  order  in  stocks  (or  in  grain, 
cotton  or  coffee,  etc.)  to  be  executed  partly  at  one  time  or 
price  and  partly  at  another  time  or  price. 

Split  quotation.  Designation  for  a  quotation  in  sixteenths, 
occasionally  used  in  grain,  but  seldom  in  stocks.  For  instance 
lo  1-16  is  a  split  quotation.  Regular  quotations  are  in  eighths; 
10  1-8  is  a  regular  quotation. 

Split  sale.  Designation  for  a  sale  of  stocks  (or  of  grain, 
cotton  or  coffee,  etc.)  partly  at  one  time  or  price  and  partly  at 
another  time  or  price. 

Split  stock.  London  Stock  Exchange  term  for  ordinary 
(common)  stock  which  has  been  divided  into  preferred  or- 
dinary, which  receives  a  fixed  rate  of  dividend,  and  deferred 
ordinary,  which  receives  a  varying  dividend  in  accordance 
with  the  balance  remaining  after  payment  on  the  preferred 
ordinary. 

Splitting  commissions.  When  a  broker  divides  his  com- 
mission with  a  customer  or  with  somebody  else  who,  for  in- 
stance, procures  business  for  him  he  has  split  his  commission. 
This  is  an  infraction  of  New  York  Stock  Exchange  rules. 

Spondulicks.  A  slang  name  for  money,  more  particularly 
for  paper  money,  as  "I  have  spondulicks,"  meaning  money. 
The  name  was  frequently  used  in  referring  to  greenbacks 
(United  States  notes)  when  they  were  the  chief  circu- 
lating medium.  The  name  is  said  originally  to  have  been 
applied  to  the  cowry-shells  used  as  money  on  the  west 
coast  of  Africa.  There  is  a  specimen  of  cowry-shell  money  in 
the  Mint  at  Philadelphia  which  was  obtained  from  Spondula, 
Africa,  and  on  it  has  been  conferred  the  nickname  spondulick. 

Spot.  A  spot  contract  in  grain,  cotton  or  coffee,  etc.,  is 
one  for  immediate  fulfilment ;  same  as  cash. 

Spot  cash,  ("ash  paid  on  the  spot;  that  is,  cash  paid  im- 
mediately. 

Also  see  Net  cash. 


SMITH'S  FINANCIAL  DICTIONARY.  493 

Spot  quotation.     The  price  for  immediate  delivery. 

Spread.  A  spread  is  like  a  straddle  a  double  privilege,  a 
put  and  a  call  combined.  If  the  stock  goes  below  the  price 
named  in  the  put  end  (or  part),  plus  the  cost  of  the  spread, 
the  holder  of  the  spread  profits  ;  so,  also,  if  the  stock  goes 
above  the  price  named  in  the  call  end  (or  part),  plus  the  cost 
of  the  call,  the  holder  of  the  call  profits. 

Illustration :  A  spread  on  loo  shares  ma}^  be  bought  on 
which  the  stock  may  be  called  (called  for)  at  102  1-2,  or  put 
(delivered)  at  97  1-2.  Say.  2  1-2  per  cent  ($250)  is  pqid  for  the 
spread.  Then  the  stock  must  go  above  105  or  below  95  be- 
fore there  is  a  profit  in  the  spread. 

If  a  dividend  becomes  due  on  a  stock  during  the  pendency 
of  a  spread  on  it  the  dividend  goes  to  the  holder  of  the  spread 
if  he  elects  to  receive  and  pay  for  the  stock,  but  it  goes  to  the 
seller  of  the  spread  if  the  stock  is  put  (delivered)  to  him.  A 
dividend  always  goes  with  the  stock. 

For  additional  information  see  Privilege. 

The  term  spread  is  also  applied  to  an  arbitrage  operation  in 
a  commodity  (grain,  cotton  or  coffee,  etc.)  and  also  in  a 
stock  when  different  prices  prevail  normally  as  well  as  from 
fluctuations  for  the  same  thing  in  different  markets. 

The  thing  is  sold  in  one  market  and  simultaneously  bought 
in  another  to  be  subsequently  bought  where  it  was  sold  and 
simultaneously  sold  where  it  was  bought. 

In  grain,  for  instance,  there  is  a  normal  difference  in  price 
betvv'ecn  two  markets  equal  to  the  cost  of  transporting  the 
grain  from  the  market  where  the  lower  price  prevails  to  the 
market  where  the  higher  price  prevails.  To  permit  a  profit  on 
a  spread  the  difference  in  price  between  the  two  markets  must 
be  greater  than  the  normal  difference. 

Grain  may,  for  example,  be  sold  in  New  York  and  bought 
in  Chicago  when  the  price  in  New  York  is  sufficiently  above 
the  price  in  Chicago  to  more  than  equal  the  cost  of  the  trans- 
portation of  the  grain  from  Chicago  to  New  York. 

The  normal  difference  between  New  York  and  Chicago  in 
the  price  of  wheat  is,  say,  6  cents  a  bushel — that  is,  wheat 
is  normallv  6  cents  a  bushel  higher  in  price  in  New  York  than 
in  Chicago.     Say  a  difference  of  8  cents  or  2  cents  more  than 


494  SMITH'S  FINANCIAL  DICTIONARY, 

the  normal  difference  is  found  to  exist.  The  speculator  sells 
in  New  York  and  buys  in  Chicago.  If  the  New  York  price 
drops  2  cents  while  the  Chicago  price  remains  stationary  the 
speculator  sells  in  Chicago  and  neither  makes  nor  loses  on 
the  transaction  there  while  he  buys  in  New  York  and  makes 
2  cents  a  bushel  on  the  transaction  there.  Or,  if  the  New  York 
price  drops  i  cent  and  the  Chicago  price  advances  i  cent  he 
sells  in  Chicago  and  makes  i  cent  a  bushel  on  the  transaction 
there  and  he  buys  in  New  York  and  makes  i  cent  a  bushel  on 
the  transaction  there   or  2  cents  in  the  two  places. 

A  spread  is  distinguished  from  a  back  spread  from  the  fact 
that  in  a  spread  the  difference  in  price  between  the  two  mar- 
kets is  greater  than  the  normal  difference ;  whereas,  in  a 
back  spread  the  difference  in  price  between  the  two  markets 
is  less  than  the  normal  difference;  see  Back  spread. 

A  spread  between  New  York  and  Liverpool  or  between  Chi- 
cago and  Liverpool  or  between  any  market  in  one  country  and 
any  market  in  another  country  is  effected  in  the  same  manner 
as  a  spread  between  New  York  and  Chicago. 

Likewise,  a  spread  in  cotton,  coffee  or  any  other  commodity 
is  effected  in  the  same  manner  as  in  grain. 

For  information  as  to  a  spread  in  an  abritrage  operation  in  a 
stock  see  Arbitrage. 

Spread-eagle.  A  name  formerly  applied  to  a  spread  on  a 
stock ;  see  Spread. 

Spring  wheat  states.  The  states  which  produce  large  crops 
of  spring  wheat,  viz :  Iowa,  Minnesota,  Nebraska,  North  Da- 
kota, South  Dakota,  Washington,  Wisconsin. 

Squeeze.  When  the  bears  have  sold  stocks  short  and  are 
compelled  to  buy  them  back  at  heavy  loss  to  themselves  they 
have,  in  speculative  parlance,  been  squeezed. 

The  culmination  of  a  corner  is  also  designated  a  squeeze ;  see 
Corner. 

Squeezed  out.  A  Wall  Street  colloquialism,  meaning  en- 
forced liquidation  ;  the  compulsory  closing  of  a  transaction  by 
reason  of  inability  longer  to  provide  margin  or  inability  longer 
to  endure  loss. 

STA.  As  printed  on  the  tape  by  the  stock  ticker  these 
letters   mean    stamped,   as   a  bond   or   stock   stamped   with   a 


SMITH'S  FINANCIAL  DICTIONARY.  495 

guarantee  or  some  condition  or  with  an  acknowledgment  of  an 
assessment  paid  on  it. 

Stag.  London  Stock  Exchange  term  for  one  who  sub- 
scribes for  shares  or  stock  of  a  new  company  or  for  a  new 
issue  of  stock  or  shares,  with  no  intention  of  keeping  the  stock 
or  shares,  but  instead  of  selling  at  once  at  a  profit.  As  soon  as 
he  receives  notice  of  his  allotment  he  sells  at  the  premium 
quoted  in  the  market. 

Stagging  the  market.  London  Stock  Exchange  term  de- 
scribing the  operation  of  speculators  who  subscribe  for  the 
stock  or  shares  of  a  new  company  only  for  the  purpose  of  sell- 
ing their  allotment  at  a  premium  ;  such  an  operator  is  a  stag. 

Stale  bull  account.  London  Stock  Exchange  term,  mean- 
ing a  situation  when  the  bulls  who  have  been  holding  stocks 
have  become  wearied  and  are  anxious  to  sell,  even  at  a  loss. 

Stale  check.  A  check  retained  for  an  unduly  long  time  be- 
fore presentation  for  collection. 

Stamp-duty.  In  Great  Britain  a  duty  or  tax  imposed  on  the 
paper  or  parchment  on  which  legal  instruments  are  written ; 
also,  a  duty  or  tax  imposed  on  certain  commodities  to  which 
(when  in  package)  a  government  label  is  attached  in  evidence 
that  the  duty  or  tax  has  been  paid. 

Stamped  bond  or  stock.  A  bond  or  stock  upon  which 
some  condition,  guarantee,  privilege  or  requirement  is  stamp- 
ed. .A  bond  which  is  guaranteed  by  another  company 
u-^^ually  has  the  guarantee  stamped  on  it.  A  stock  upon  which 
an  assessment  is  levied  has  stamped  upon  it  payments  of  in- 
stalments of  the  assessment  as  the  pa3^ments  are  made. 

Stamp-tax.     Same  as  stamp-duty ;  see  Stamp-duty. 

Standard.  In  its  relation  to  money  standard  means  the 
measure  or  basis  of  value. 

A  country  where  gold  alone  is  b}^  law  the  basis  of  value  has 
a  single  standard ;  where  silver  alone  is  by  law  the  basis  of 
value  the  country  has  a  single  standard.  Where  both  gold 
and  silver  are  used,  the  one  in  fixed  proportion  to  the  other, 
the  country  has  a  double  standard  or  bimetallic  standard.  A 
country  using  paper  money  alone  has  no  standard. 

For  additional  information  see  Monetary  standard. 

Standard   gold   dollar.     A  gold   coin  of  the   L^nited   States, 


4Q0  SMITH'S  FINANCIAL  DICTIONARY. 

weighing  25.8  grains,  nine-tenths  fine,  that  is,  nine-tenths  gold 
and  one-tenth  alloy.  The  gold  dollar  is  no  longer  coined,  but 
it  remains  the  basis  of  value. 

Standard  of  coinage.  The  proportion  of  weight  of  fine 
(pure)  metal  and  alloy  in  coins  as  established  by  law.  For 
additional  information  see  Monetary  standard. 

Standard  silver  dollar.  The  silver  dollar  of  the  United 
States,  weighing  412  1-2  grains,  nine-tenths  fine,  that  is,  nine- 
tenths  silver  and  one-tenth  alloy  (copper). 

The  phrase  "standard  silver  dollar"  is  a  misnomer.  It  was 
first  employed  to  distinguish  the  dollar  of  412  1-2  grains  from 
the  trade  dollar  of  420  grains.  The  standard  silver  dollar  is, 
as  a  fact,  not  a  standard  of  anything ;  its  value  in  trade  is  much 
more  than  its  metallic  value  because  the  government  prac- 
tically redeems  it  in  gold. 

State  bank.  One  deriving  its  authority  to  do  business  from 
the  state  in  which  it  is  situated. 

A  state  bank  in  New  York  state  in  a  city  of  more  than  800,- 
000  inhabitants  is  required  to  keep  a  reserve  of  15  per  cent  and 
in  a  place  of  less  than  800,000  inhabitants  it  is  required  to  keep 
a  reserve  of  10  per  cent.  This  is  called  "lawful  money  re- 
serve." The  requirement  is  the  same  in  the  case  of  a  private 
bank  or  banker  operating  under  the  supervision  of  the  banking 
department. 

P'or  additional  information  see  Bank. 

State  Bank  of  Indiana.  The  State  Bank  of  Indiana  occupies 
a  notable  place  in  tlie  financial  history  of  the  United  States. 
It  was  practically  a  state  institution,  the  state  owning  one-half 
of  its  capital  stock  and  appointing  its  president  and  four  of  its 
seven  directors.  The  State  Bank  was  a  supervisory  institution. 
It  did  not  itself  carry  on  banking  operations ;  the  actual  bank- 
ing business  was  conducted  by  seventeen  branch  banks.  The 
State  Bank  had  a  monopoly  of  banking  and  the  right  to  issue 
notes  in  the  state  of  Indiana  ;  by  law  no  other  banking  corpora- 
tion was  to  be  created  or  permitted  in  the  state. 

The  State  Bank  of  Indiana  began  business  November  20, 
1834.  Its  management  was  remarkably  strong.  So  high  was 
the  standing  of  the  bank  that  in  the  panic  of  1837,  when  bank 
failures  throughout  the  country  were  numerous  and  the  notes 


SMITH'S  FINANCIAL  DICTIONARY.  497 

of  banks  in  other  states  were  at  a  great  discount,  the  notes  of 
the  State  Bank  of  Indiana  were  at  a  premium  in  the  West  and 
South  and  in  the  East  were  at  a  slight  discount  only. 

The  State  Bank  was  succeeded  in  1857  by  the  Bank  of  the 
State  of  Indiana,  a  private  corporation,  the  legislature  having 
repealed  the  law  which  granted  a  monopoly  in  banking  to  the 
State  Bank  and  decreed  that  the  state  should  not  longer  be  a 
stockholder  in  any  bank.  The  Bank  of  the  State  of  Indiana,  like 
the  State  Bank  of  Indiana,  was  a  supervisory  institution.  It 
conducted  its  banking  business  through  twenty  branches. 
The  Bank  of  the  State  of  Indiana  maintained  the  splendid 
record  of  its  predecessor,  the  State  Bank  of  Indiana,  and  con- 
tinued until  1866,  when  it  voluntarily  wound  up.  It  stopped 
on  account  of  the  imposition  of  a  Federal  tax  of  10  per  cent 
on  notes  other  than  those  issued  by  national  banks,  which 
effectually  prohibited  it  from  further  issuance  of  notes.  Seven- 
teen of  the  branch  banks  were  converted  into  national  banks, 
two  became  private  banks  and  one  liquidated. 

State  bond.     A  bond  issued  by  a  state. 

Statement.  A  detailed  written  report  of  the  existing  con- 
dition of  an  account  is  called  a  statement. 

Statement  rendered.  Same  as  account  rendered ;  see  Ac- 
count rendered. 

Statute  of  limitations.  The  statute  (law)  by  which  a  debt 
i=  outlawed  ;  see  Outlawed. 

Statutory  meeting.  Every  English  limited  company  must 
Avilhin  three  months  from  the  date  on  which  the  company  is 
entitled  to  start  business  hold  a  general  meeting,  which  is 
called  statutory,  at  which  certain  formal  information  has  to  be 
given  to  shareholders. 

Stealing  eighths  and  quarters.  An  expression  used  (es- 
pecially in  the  stock  market)  when  a  dishonest  broker  reports 
to  customers  purchases  1-8  or  1-4  per  cent  above  and  sales  1-8 
or  1-4  per  cent  below  the  actual  prices  in  transactions.  These 
differences  he  retains  for  his  own  benefit,  defrauding  his  cus- 
tomers of  them.  This  practice  is  infrequent.  It  is  fraud  and 
is  punishal:)le  by  expulsion  from  an  exchange. 

Sterling.  The  standard  of  monetary  value  established  by 
the  British  government :  a  general  designation  for  English 
monev. 


49S  SMITH'S  FINANCIAL  DICTIONARY. 

The  term  sterling  is  also  applied  to  gold  or  silver  in  ingots 
or  bars  of  the  standard  of  value  or  fineness  established  by  the 
British  government.  Sterling  gold  is  22  parts  pure  gold  and  2 
parts  alloy ;  sterling  silver  is  222  parts  pure  silver  and  18 
parts  alloy. 

Sterling  bill.  A  bill  of  exchange  payable  in  pounds  sterling. 
There  are  demand  bills,  which  are  payable  on  presentation, 
and  time  bills,  which  are  payable  at  specified  future  dates. 
There  are  also  cable  transfers  or  cables  by  which  payment  is 
ordered  by  cable. 

For  additional  information  see  Foreign  exchange. 

Sterling  bond.  A  bond  payable,  principal  and  interest,  in 
pounds  sterling. 

Sterling  exchange.  Exchange  (drafts)  on  London  or  any 
part  of  Great  Britain  and  Ireland,  or,  speaking  generally, 
drafts  payable  in  English  money  (pounds  sterling). 

For  additional  information  see  Foreign  exchange. 

Sterling  loan.  A  loan  of  a  bill  of  sterling  exchange.  The 
borrower  of  the  bill  gives  his  note  for  it  and  pledges  stocks  or 
other  property  for  its  payment  when  due.  Then  he  sells  the 
bill  of  exchange  and  obtains  the  money  on  it,  unless  he  should 
wish  to  use  it  in  discharging  a  remittance  abroad,  in  which 
case  he  forwards  it  to  London  or  wherever  the  obligation  may 
be  payable.  When  the  obligation  becomes  due  it  is  (gen- 
erally) settled  by  the  delivery  of  a  demand  bill  of  sterling  ex- 
ch.ange  which  the  debtor  (the  borrower  of  the  original  bill) 
has  purchased  for  the  purpose.  Sterling  loans  are  obtained 
wlien  it  is  difficult  to  obtain  money  in  the  usual  ways. 

Stock.  The  capital  of  a  company  represented  by  shares  for 
which  negotiable   (transferable)   certificates  are  issued. 

The  usual  varieties  of  stock  in  the  Ignited  States  are  pre- 
ferred (there  may  be  first  and  second  preferred  and  even 
third  preferred)  and  common  (occasionally  called  ordinary  or 
general  stock).  Preferred  stock  is  preferred  as  to  assets  and 
dividends.  It  must  receive  a  dividend  before  one  can  be  paid 
on  the  common  stock  and  in  a  distribution  of  assets  it  partici- 
pales  ahead  of  common  stock.  Cumulative  preferred  stock  is 
stock  the  dividends  on  which  if  not  paid  regularly  or  in  full 
accumulate  and  must  1)e  paid  in  the  future  before  a  dividend 
can  be  paid  on  tlic  common  stock.     Common  stock  is  not  pre- 


SMITH'S  FINANCIAL  DICTIONARY.  499 

feired  as  to  dividends  or  assets  and  seldom  or  never  is  made 
cumulative.  Often  its  chief  value  is  its  voting  pov^er.  In 
addition  there  is  founders'  stock,  which  is  issued  to  the  or- 
ganizers of  a  company  for  services.  It  is  entitled  to  partici- 
pate in  profits  after  a  certain  rate  of  dividend  has  been  paid  on 
tho  common  stock  in  any  one  period.  Such  stock  formerly 
was  frc(|uently  issued  in  Great  Britain,  but  it  rarely  has  been 
issued  in  the  United  States. 

In  Great  Britain  when,  for  dividend  purposes,  the  ordinary 
(common)  stock  of  a  company  has  been  divided  into  two 
parts  called  preferred  or  "B"  stock  and  deferred  or  "A" 
stock  tlie  d'vidcnd  on  the  A  stock  is  deferred  until  a  fixed 
amount  has  been  paid  on  the  B  stock.  This  B  or  preferred 
stock  is  not  the  same  as  preferred  stock  in  the  United  States. 
What  in  the  L'nited  States  is  called  preferred  stock  is  in  Great 
Britain  called  preference  stock  '  and  preference  stock  in 
Great  Britain  may  be  divided  into  two  or  more  classes  called 
first  preference,  second  preference,  etc..  just  as  preferred 
stock  in  the  United  States  may  be  divided  into  two  or  more 
classes  called  first  preferred,  second  preferred,  etc.  When, 
however,  there  is  but  one  class  of  preference  stock  ahead  of  an 
ordinary  stock  in  Great  Britain  the  B  or  preferred  stock  is 
equivalent  to  second  preferred  stock  in  the  United  States. 

In  Great  Britain  stocks  and  shares  are  different  forms  into 
which  the  capital  of  companies  may  be  divided.  Shares  are 
of  £1  or  £2  or  any  other  denominations  up  to  £1,000;  but 
ihe  most  usual  denominations  are  £1,  £5  and  £10.  The 
distinction  between  shares  and  stock  lies  in  the  fact  that  shares 
are  indivisible.  Any  number  of  shares  may  be  transferred,  but 
no  single  share  can  be  divided,  and  shares  are  quoted  at  so 
much  per  share.  Stock  can  be  divided  and  dealt  in,  in  some 
cases,  in  pennyworths.  For  instance,  it  is  possible  to  trans- 
fer, say,  £3,  IIS.  9d.  consols,  but  usually  stock  is  transferred 
only  in  multiples  of  £1,  and  stock  is  quoted  and  dealt  in  at  sr 
much  per  cent.  A  share  certificate  is  a  certificate  of  a  shar^ 
or  shares ;  a  stock  certificate  is  a  certificate  of  so  much  stock. 

The  securities  issued  by  a  government  are  generally  desig 
nated  as  bonds  instead  of  stock.     The  securities  issued  by  the 
Ignited  States  government  are  designated  as  bonds,  although 
foimerlv  known  as  stock.    Some  of  the  securities  issued  bv  the 


500  SMITH'S  FINANCIAL  DICTIONARY. 

city  of  New  York  are  designated  as  stock ;  but  municipalities 
as  a  rule  designate  their  securities  as  bonds  instead  of  stock. 

On  the  New  York  Stock  Exchange  no  certificate  for  more 
than  lOO  shares  of  stock  is  a  delivery,  but  any  number  of  cer- 
tificates which  are  collectively  for  lOO  shares  are  a  delivery  for 
lOO  shares  the  same  as  a  single  certificate  for  lOO  shares. 

On  the  London  Stock  Exchange  (except  by  special  con- 
tract) a  certificate  of  American  shares  (stocks)  is  not  ac- 
cepted for  a  larger  amount  than  lo  shares  of  $ioo  each  or  20 
shares  of  $50  each  ;  also,  an  American  bond  for  a  larger  amount 
than  $1,000  is  not  accepted. 

Stock  broker.  One  who  executes  orders  to  buy  and  sell 
stocks. 

Stock  call.  The  act  of  calling  off  at  an  exchange  or  trading 
pl?ce  the  list  of  stocks  dealt  in  there.  As  the  names  of  the 
stocks  are  called  the  buyers  and  sellers  make  their  bids  and 
offers. 

For  a  definition  of  the  term  call  as  applied  to  an  option  see 
Call. 

Stock  certificate.     See  Certificate  of  stock. 

In  Great  Britain  a  distinction  is  made  between  stock  and 
shares ;  see  Stock. 

Stock  company.  Same  as  joint-stock  company ;  a  company 
whose  capital  stock  is  divided  into  shares  of  equal  amount. 
For  additional  information  see  Company. 

Stock  dividend.  A  dividend  payable  in  the  stock  of  a  com- 
pany which  declares  such  a  dividend  or  (occasionally)  in  the 
stock  of  a  company  owned  by  it. 

Stock  exchange.  A  place  where  stocks  and  bonds  are  dealt 
m.     See  New  York  Stock  Exchange. 

Stock  exchange  clearing  house.  See  New  York  Stock  Ex- 
change clearing  house. 

Stock  exchange  collateral.  Consists  (in  New  York)  of 
securities  which  are  dealt  in  on  the  New  York  Stock  Ex- 
change.    For  additional  information   see  Collateral  loan. 

Stock  Exchange  Daily  Official  List.  A  list  of  stocks 
dealt  in  on  the  London  Stock  Exchange,  published  by  the 
exchange;  the  designation  in  it  "Business  done"  means  that 
transactions  have  taken  place  at  the  prices  specified,  the  prices 
being  derived  from  jobbers'  and  brokers'  markings  (prices  re- 


SMITH'S  FINANCIAL  DICTIONARY.  501 

ported    by   jobbers    and    brokers   who   did    business    at   those 
prices). 

The  corresponding  publication  in  New  York  is  the  daily  list 
of  sales  on  the  New  York  Stock  Exchange;  but  this  list  is 
not  "official." 

Stock  exchange  lists.     See  Stock  lists. 

Stockholder.     A  holder  (owner)  of  stock. 

A  stockholder  in  a  New  York  corporation  is  personally 
liable  to  an  amount  equal  to  the  amount  of  stock  held  by  him 
for  every  debt  of  the  corporation  until  the  whole  amount  of 
its  stock  issued  and  outstanding  at  the  time  such  debt  was  in-' 
curred  shall  have  been  fully  paid.  After  the  stock  is  fully 
paid  a  stockholder  is  not  personally  liable  except  to  working- 
mt-n  and  others  employed  by  the  corporation.  In  both  classes 
of  liabilities  judgment  must  first  be  taken  against  the  corpora- 
tion and  an  execution  thereon  returned  unsatisfied  in  whole  or 
in  part. 

It  is  provided  in  the  New  York  law  that  "no  stockholder 
shall  be  personally  liable  for  any  debt  of  the  corporation  not 
payable  within  two  years  from  the  time  it  is  contracted,  nor 
unless  an  action  for  its  collection  shall  be  brought  against 
the  corporation  within  two  years  after  the  debt  becomes  due ; 
and  no  action  shall  be  brought  against  a  stockholder  after  he 
shall  have  ceased  to  be  a  stockholder  for  any  debt  of  the  cor- 
poration unless  brought  within  two  years  from  the  time  he 
shrdl  have  ceased  to  be  a  stockholder." 

If  a  corporation  fails  no  personal  liability  attaches  to  stock- 
holders beyond  that  here  specified.  Furthermore,  this  liability 
attaches  only  in  case  the  amount  of  the  debt  cannot  be  re- 
covered from  the  corporation  itself. 

Stock-jobbing.  In  New  York  this  term  means  the  raising 
or  lowering  of  prices  of  stocks  by  dishonest  or  irregular 
methods. 

On  the  London  Stock  Exchange  the  term  has  no  connotation 
of  dishonesty ;  it  means  merely  dealing  in  stocks,  whether  by 
outsiders  who  are  gambling  for  differences  or  by  jobbers  in 
the  course  of  their  business.     See  Jobber. 

Stock  lists.  The  daily  printed  lists  of  sales  at  the  New 
New  York  Stock  Exchange ;  these  lists  are  not  "official." 

The  blue  list,  a  list  printed  on  blue  paper,  contains  a  list  of 


502  SMITH'S  FINANCIAL  DICTIONARY. 

the  most  active  stocks  dealt  in,  with  the  high,  low  and  last 
prices,  together  with  the  number  of  shares  of  each  stock  dealt 
in. 

The  red  list  is  a  list  printed  on  red  paper,  containing  more 
stocks  than  the  blue  list  (practically  all  the  active  stocks),  but 
not  all  the  stocks  dealt  in.  The  high,  low  and  last  prices  are 
given,  together  with  the  number  of  shares  of  each  stock  dealt 
in. 

The  white  list,  printed  on  white  paper,  contains  the  transac- 
tiens  in  detail  in  all  stocks  and  bonds  dealt  in.  This  white  list 
is  divided  into  three  parts  called  boards.  The  first  board 
contains  sales  from  lo  a.  m.  to  12  noon.  The  second  board 
contains  sales  from  12  to  2  p.  m.  The  last  board  contains  sales 
from  2  to  3  p.  m. 

Formerly,  wdien  there  were  calls  of  stocks,  first  board  was 
the  term  applied  to  the  first  call  of  stocks,  second  board  to  the 
second  call  and  last  board  to  the  last  call. 

Stock  loan.  A  loan  of  stock  as  distinguished  from  a  loan  of 
money.    See  Borrowing  and  lending  stocks. 

Sometimes  the  term  stock  loan  is  applied  to  a  loan  of  money, 
when  the  collateral  pledged  consists  of  stocks. 

Stock  market  conditions.  The  following  terms  applied  to 
thf  varying  phases  of  the  stock  market  sufhciently  express 
their  ovv^n  meaning:  Active,  artificial,  booming,  crazy,  dead, 
duH,  excited,  feverish,  fictitious,  firm,  flat,  fluctuating,  healthy, 
heavy,  inactive,  irregular,  lively,  panicky,  quiet,  ragged, 
rampant,  sagging,  soft,  stagnant,  steady,  strong,  uneasy,  un- 
healthy, unsettled,  weak.  wild. 

Stock  note.  This  is  a  name  used  in  Wall  Street  for  a  col- 
lateral note — a  note  the  collateral  to  secure  which  consists  of 
stocks  (or  bonds  or  both  stock  and  bonds). 

This  name  also  is  applied  to  the  form  of  the  note — that  is, 
the  reading  of  the  note.  For  the  customary  form  of  a  stock 
note  (collateral  note)  see  Collateral  note. 

Stock  of  money.  This  designation  includes  all  money 
issued  by  the  go\ernment,  whether  in  the  Treasury  or  in  cir- 
culation. 

Stock  power.  The  name  given  to  the  irrevocable  power  of 
attorney  used  in  assigning  or  transferring  title  to  a  certificate 
of  stock. 


SMITH'S  FINANCIAL  DICTIONARY.  503 

Stock  savings  bank.  A  stock  savings  bank  is  one  organized 
with  a  capital  stock  and  the  stockholders  receive  in  dividends 
profits  over  and  above  the  interest  paid  on  deposits.  For  ad- 
ditional information  sec  Savinsrs  bank. 

Stocks  borrowed  and  loaned.  See  Borrowing  and  lending 
stocks. 

Stock  ticker.     See  Ticker. 

Stolen  securities.     See  Lost    or  stolen  securities. 

Stop-loss  order.     See  Stop  order. 

Stop  order.  When  an  order  is  given  to  a  broker  for  the 
purchase  of  a  stock,  for  instance,  at  100,  with  instructions  to 
stop  it  at  98  it  means  that  the  stock  is  to  be  sold  if  it  de- 
clines to  98.  On  the  other  hand,  if  a  stock  is  sold  short  at  100 
with  instructions  to  stop  it  at  102  it  is  to  be  bought  back  if 
it  advances  to  102.  A  stop  order  is  employed  principally  to 
limit  loss  in  speculation  ;  in  such  a  case  it  is  specifically  desig- 
nated as  a  stop-loss  order. 

Stop  payment.  When  a  check  has  been  lost  or  stolen  the 
bank  upon  which  it  is  drawn  is  notified  to  stop  payment  on  it 
if  it  is  presented. 

Stopping  stocks  at  a  stock  exchange.  When  one  broker  has 
an  order  to  buy  a  certain  stock  at  a  certain  price  and  another 
has  an  order  to  sell  the  same  stock  at  the  same  price  the  two 
brokers  agree  that  a  transaction  in  the  stock  shall  be  con- 
summated between  them  when  that  price  is  reached.  In  the 
vernacular  of  speculation  the  brokers  "stop"  the  stock  at  the 
agreed  price. 

Straddle.  A  straddle  is  like  a  spread  a  double  privilege,  a 
put  and  a  call  combined,  but  only  one  price  is  named  in  it. 
The  stock  may  be  called  (called  for)  or  put  (delivered)  at 
th'S  price.  The  stock  must  go  up  or  down  more  than  the 
amount  paid  for  the  straddle  before  there  is  a  profit  in  it. 

Illustration  :  A  stock  is  selling  at  100  and  a  straddle  on  100 
shares  is  bought  at  this  i)rice,  for  which  5  ])er  cent  ($500)  is 
paid.  The  stock,  therefore,  must  go  abo\  e  105  or  below  95 
before  there  is  a  profit  to  the  purchaser  of  the  straddle. 

If  a  dividend  becomes  due  on  a  stock  during  the  pendency 
of  a  straddle  on  it  the  dividend  goes  to  the  holder  of  the 
straddle  if  he  elects  to  receive  and  pay  for  the  stock,  but  ic 


304  SMITH'S  FINANCIAL  DICTIONARY. 

goes  to  the  seller  of  the  straddle  if  the  stock  is  put  (delivered) 
to  him.    A  dividend  always  goes  with  the  stock. 

For  additional  information  see  Privilege. 

Straddled  the  market,  A  speculator  who  is  long  of  one 
stock  and  short  of  another  is  said  to  have  straddled  the 
market. 

Straight  paper.  A  designation  for  single  name  paper — a 
promissory  note  which  is  without  indorsement. 

Street,  The.  An  abbreviation  of  Wall  Street  and  a  common 
designation  for  the  financial  district  in  New  York. 

In  London  the  term  "The  Street"  means  the  vicinity  of  the 
Stock  Exchange,  where  dealings  go  on  after  the  exchange  (the 
house,  so-called)  is  closed. 

Striking  a  balance.  Finding  the  difference  between  debits 
and  credits. 

Striking   a  bargain.     Coming  to   a   mutual   agreement. 

Stub  or  counterfoil.  A  portion  of  a  document  permanently 
retained  in  a  book  as  a  memorandum  after  the  other  portion 
has  been  detached  by  means  of  a  line  of  perforations  or  other- 
wise, as  the  stub    or  counterfoil  of  a  check   or  receipt. 

Stuff.  It  is  a  common  habit  in  the  markets  for  grain,  cotton, 
coffee,  etc.,  to  speak  of  the  actual  property  as  the  actual 
stuff  in  contradistinction  to  contracts  calling  for  delivery  of  the 
property  at  some  future  time.  Such  contracts  are  called 
futures. 

Sub-company.  Subsidiary  company ;  see  Subsidiary  com- 
pany. 

Subsidiary  coin.  Same  as  divisional  or  fractional  coin ;  a 
coin  less  than  $i  in  value.  The  subsidiary  coins  are  the  silver 
half-dollar,  quarter-dollar  and  dime  (lo  cents),  nickel  5-cent 
piece  and  bronze  i-cent  piece. 

Subsidiary  coins  are  issued  according  to  the  needs  of  the 
country  and  are  redeemable  at  the  Treasury  in  sums  of  $20  and 
multiples  thereof. 

The  silver  half-dollar  does  not  weigh  one-half  as  much  as 
a  silver  dollar;  neither  does  the  quarter-dollar  weigh  one- 
fourth  as  much,  nor  the  dime  (10  cents)  one-tenth  as  much. 
The  half-dollar  weighs  13.35  grains  less  than  half  the  weight  of 
the  dollar    and  the  weights  of  the  quarter-dollar  and  dime  are 


SMITH'S  FINANCIAL  DICTIONARY.  505 

proportionately  less.  The  ratio  of  subsidiary  silver  coins  to 
gold  is  14-953  to  i. 

The  weights  of  the  subsidiary  coins  were  made  proportion- 
ately less  than  the  weight  of  the  dollar  to  prevent  the  exporta- 
tion of  the  subsidiary  pieces  when  the  bullion  value  of  the 
silver  in  a  silver  dollar  should  be  worth  100  cents  or  more 
than  100  cents,  which  was  the  case  at  one  time. 

The  5-cent  nickel  and  the  i-cent  bronze  are  specifically  minor 
coins. 

Subsidiary  company.  A  company  whose  entire  stock  is 
owned  by  another  company;  or  which  is  controlled  through 
ownership  of  a  majority  of  its  stock  by  another  company. 

Subsidy.  Pecuniary  aid  granted  by  a  government  to  an  en- 
terprise deemed  productive  of  public  benefit. 

Substitution.  A  power  of  attorney  and  substitution  permits 
the  one  holding  the  power  to  transfer  it  to  another — to  sub- 
stitute another  for  himself. 

The  word  substitution  also  is  used  when  securities  pledged 
as  collateral  are  withdrawn  and  replaced  with  other  securities 
by  consent  of  the  one  holding  the  collateral. 

Sub-Treasury.  A  branch  of  the  United  States  Treasury  foi 
the  receipt  and  disbursement  of  revenues  and  in  charge  of  an 
Assistant  Treasurer  of  the  United  States. 

Successive  indorsement.  Successive  indorsement  is  made 
by  several  persons,  the  legal  effect  being  to  subject  each  of 
them  to  each  other  in  the  order  in  which  they  indorse ;  the  in- 
dorsement imparts  several  and  successive,  but  not  joint  obli- 
gation. 

Suffolk  Bank  system.  A  term  derived  from  a  scheme  for 
the  redemption  of  the  notes  of  state  banks  which  w^as  devised 
by  the  Suffolk  Bank  of  Boston  in  18 13. 

The  notes  of  Boston  banks  at  the  time  were  worth  100 
cents  on  the  dollar  while  those  of  the  country  banks  of  New 
England  w-ere  at  a  discount.  The  Suffolk  Bank  proposed  to 
redeem  the  notes  of  the  country  banks  at  par  if  the  country 
banks  would  keep  a  fixed  deposit  with  it,  plus  a  variable  de- 
posit to  redeem  such  of  their  notes  as  should  reach  Boston 
in  the  course  of  trade.  The  interest  derived  from  the  use 
of  the  fixed  deposit  was  to  reimburse  the  Suffolk  Bank  for 
doing  the   business.     The   plan   served   to   keep   the   issue   of 


3o6         •  SMJTHS  FINANCIAL  DICTIONARY. 

notes  within  wholesome  limits,  as  it  required  a  backing  for 
them ;  at  the  same  time,  for  the  reason  that  a  backing  was  pro- 
vided lor  them  and  likewise  that  a  central  place  of  redemp- 
tion was  provided,  the  value  of  the  notes  was  maintained  at 
par. 

Sunday.  In  New  York  state  when  a  contract  matures  on 
Sunday  the  following  Monday  is  the  earliest  day  upon  which 
performance  can  be  exacted.  The  debtor  cannot  be  compelled 
to  pay  on  Saturday,  because  his  debt  is  not  then  due.  The  law 
excuses  him,  for  reasons  of  public  policy,  from  making  pay- 
ment on  Sunday  and  no  valid  demand  can  be  made  before 
Monday. 

If  a  life  insurance  premuim  or  any  other  debt  not  evidenced 
by  a  promissory  note  or  check  or  some  form  of  paper  falls 
due  on  Saturday  there  is  no  rule  of  law  under  which  its  pay- 
ment can  be  deferred  until  ^Monday.  Only  half  of  Saturday  is 
a  holiday  and  only  such  debts  are  allowed  to  go  over  from 
that  day  until  Monday  as  are  expressly  provided  for  in  the 
statute.     But  all  debts  falling  due  on  Sunday  go  over. 

If  a  note  is  dated  on  Sunday  but  is  delivered  on  a  week 
day  it  is  legal,  for  the  validity  of  a  note  depends  on  the  time  of 
its  delivery  and  not  on  the  time  of  its  inception.  Even 
though  a  note  were  made  and  delivered  on  Sunday  the  payee 
could  throw  it  aside  and  sue  for  the  money  itself;  in  other 
words,  he  could  disregard  the  actual  or  express  contract  (the 
note)  and  sue  on  the  contract  implied  by  the  law. 

The  law  discountenances  the  making  of  contracts  and  the 
transaction  of  business  on  Simday.  But  making  a  note  is 
not  transacting  business ;  the  business  is  done  on  the  day  when 
the  note  is  delivered.  A  note  drawn  on  Sunday,  no  matter 
what  date  it  bears,  and  a  note  drawn  on  a  secular  day  (week- 
day) but  bearing  a  Sunday  date,  are  both  good  if  delivered 
on  a  secular  day.  The  holder  of  a  note  bearing  a  Sunday  date 
is  not  entitled  to  demand  a  new  note,  but  he  is  entitled  to 
enforce  the  one  he  holds. 

Sundry  assets.  Unclassified  remaining  and  usually  unim- 
pt)rtant  assets. 

Surety.  A  person  (or  corporation)  who  executes  a  bond  of 
guaraiit\' ;  also,  a  bond  of  guarantv  is  a  stiretv. 


SMITH'S  FINANCIAL  DICTIONARY.  507 

Surety  company.  A  company  that  furnishes  bonds  of 
surety  ;  that  acts  as  a  guarantor. 

Suretyship.     The  act  and  obligation  of  surety. 

Surplus.  I'rofit  set  aside  after  paying  expenses  and  after 
necessary  deductions,  as  for  interest,  dividends,  rentals,  taxes, 
etc. 

Surplus  reserve.  The  amount  held  by  a  bank  against  de- 
posits in  excess  of  the  amount  required  by  law  to  be  held ;  see 
Bank  reserve. 

Surplus  state.  A  name  given  to  a  state  which  grows  more 
grain  (or  other  commodity)  than  is  required  for  consumption 
within  its  own  borders. 

Suspense  account.  An  account  in  which  items  are  charged 
or  credited  temporarily  until  it  can  be  determined  in  what  ac- 
count they  should  be  entered;  an  accotmt  of  unpaid  notes, 
disputed  claims  and  money  in  litigation  ;  an  account  of  claims 
of  dubious  value. 

Suspension  of  specie  payments.  The  banks  suspended  specie 
payments  December  28,  1861,  as  a  consequence  of  the  with- 
drawal of  gold  on  deposit  with  them  by  the  government. 
Specie  payments  were  resumed  on  January  i,  1879. 

Sweating  coins.  This  is  a  name  for  an  illegal  process  by 
whxh  a  percentage  of  the  metal  in  gold  and  silver  coin  is 
taken  away.  The  method  employed  is  to  place  a  number  of 
coins  in  a  bag  and  shake  them  roughly  until  a  portion  of  the 
metal  is  worn  off  by  abrasion — by  friction.  The  dust  thus 
obtained  is  sold  and  the  coins  are  put  into  circulation  again. 

Sweetening  a  loan.  A  colloquialism  used  in  Wall  Street 
when  high  class  securities  are  included  in  the  collateral  pledged 
for  a  loan. 

Swop.  A  colloquial  term,  meaning  the  same  as  barter;  an 
exchange  of  property. 

Sworn  broker.      For  information  see  Bourse. 

Syndicate.  As  a  financial  term  syndicate  means  several 
bankers  or  capitalists  who  join  together  to  carry  out  or  to 
insure  the  carrying  out  of  some  plan  or  scheme  which  involves 
a  large  amount  of  money. 

The  commonest  form  of  syndicate  is  an  underwriting  syndi- 
cate. For  instance,  the  capital  stock  of  a  company  (or  a  cer- 
tain amount  of  it)  is  to  be  offered  for  public  subscription  at, 


S08  SMITH'S  FINANCIAL  DICTIONARY. 

say,  lOO  (par).  An  underwriting  syndicate  is  organized  and  it 
underwrites  the  entire  issue  at  90.  It,  in  effect,  buys  the  whole 
issue  at  90.  The  stock  taken  (subscribed  for)  by  the  public 
practically  is  sold  for  account  of  the  syndicate,  for  it  receives 
the  difference  of  10  per  cent  between  the  price  at  which  the 
stock  is  sold  to  the  public  (100)  and  the  price  at  which  it  is 
underwritten  by  the  underwriting  syndicate  (90).  The  syndi- 
cate is  obliged  to  take  the  stock  not  sold  to  (subscribed  for 
by)  the  public,  but  it  has  to  pay  only  90  for  it  as  against  100 
which  the  public  has  to  pay.  If  all  the  stock  is  taken  by  the 
public  (as  is  often  the  case)  the  underwriting  syndicate  has 
not  to  take  and  pay  for  any  stock,  but  simply  receives  and 
divides  among  its  members  (in  proportion  to  their  shares  in 
the  syndicate)  the  amount  represented  by  the  difference  of  10 
per  cent  between  the  price  of  the  stock  to  the  public  and  the 
price  to  the  underwriting  syndicate.  If  some  of  the  stock  is 
not  taken  by  the  public  it  may  be  apportioned  among  the  mem- 
bers of  the  syndicate,  but  usually  it  is  sold  (in  the  open  mar- 
ket or  otherwise)  for  the  syndicate. 

The  bonds  of  a  company  (or  a  certain  amount  of  them) 
may  be  underwritten  in  the  same  way  as  its  stock. 

A  purchasing  (or  subscription)  syndicate  is  different  from 
an  underwriting  syndicate.  A  purchasing  syndicate  actually 
subscribes  for  takes  and  pays  for  the  stock  or  bonds,  which 
may  be  allotted  to  the  members  of  the  syndicate  in  proportion 
to  their  shares  in  it,  or  the  stock  or  bonds  may  be  sold  and  the 
profit  (presuming  that  a  sale  is  made  at  a  profit)  divided  among 
the  members.  Issues  of  government,  state  and  municipal  bonds 
have  often  been  bought  by  syndicates  and  immediately  or 
very  soon  afterwards  resold  at  high  prices. 

Also  see  Reorganization. 


SMITH'S  FINANCIAL  DICTIONARY.  509 


T 


T.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  terminal,  as  terminal  bonds. 

Table  A.  English  term,  meaning  the  regulations  for  the 
management  of  a  limited  company,  contained  in  the  first 
schedule  to  the  Companies'  act,  1862. 

Tack.  As  a  speculative  term  tack  means  the  direction  in 
which  a  speculator's  interest  lies.  Tack  is  used  as  a  synonym 
for  side.  If,  for  'instance,  a  speculator  is  said  to  be  on  or  to 
have  taken  the  long  tack  or  bull  tack  on  a  stock  or  on  the 
market  it  is  meant  that  he  is  long  of  (in  London  bull  of)  a 
stock  or  of  the  market.  On  the  other  hand,  if  a  speculator  is 
said  to  be  on  or  to  have  taken  the  short  or  bear  tack  on  a 
stock  or  on  the  market  it  is  meant  that  he  is  short  of  (in  Lon- 
don   bear  of)  a  stock    or  of  the  market. 

The  term  tack  is  used  not  only  in  speculation  in  stocks,  but 
in  speculation  in  grain,  cotton,  coffee,  etc. 

Tail-ender.  A  colloquial  appellation  for  a  small  speculator 
who  acquires  an  interest  in  one  or  more  stocks  as  the  move- 
ment in  them  is  approaching  its  termination. 

Tailer.  A  colloquial  appellation  for  a  small  speculator  who 
tries  to  follow  a  large  speculator  or  group  of  speculators  in 
his  dealings. 

Take  in.  London  Stock  Exchange  term ;  when  a  bargain  is 
continued  or  carried  over  the  money  lender  or  bear  who  buys 
the  stock  for  cash  and  sells  it  again  for  the  next  settlement  is 
said  to  take  it  in.  He  generally  receives  a  contango  rate  from 
the  bull,  who  "gives  on"  the  stock ;  but  if  the  stock  is  so  much 
oversold  as  to  be  scarce  the  taker-in  pays  the  bull  or  lender  of 
the  stock   a  backwardation. 

Taken  up.  When  a  speculator  who  has  bought  a  stock  on 
margin  pays  for  it  in  full  he  is  said  to  have  taken  it  up. 

On  the  London  Stock  Exchange  a  buyer  takes  up  stock 
when  instead  of  carrying  over  his  bargain  he  pays  for  the 
stock  and  has  it  registered  in  his  name. 


510  SMITH'S  FINANCIAL  DICTIONARY. 

Taker-in.  London  Stock  Exchange  term  for  one  who  takes 
in  stocks — either  a  lender  on  stocks  or  a  bear  of  the  stock 
who  has  to  borrow  it.     See  Take  in. 

Tale  quale  or  tel  quel  rate.  In  foreign  exchange  dealings 
?.  tale  quale  or  tel  quel  rate  is  a  net  rate.  It  includes  commis- 
sion, brokerage,  or  in  short,  every  charge,  so  that  the  rate  is 
the  total  rate  or  price,  to  which  there  can  be  no  addition. 

Talon.  English  term  for  a  certificate  attached  to  a  bond 
entitling  the  holder  of  the  bond  to  a  new  set  of  coupons. 

Tape.  The  ribbon  of  white  paper  on  which  the  ticker  (in- 
dicator)   prints  quotations  of  stocks,  grain    or  cotton,  etc. 

Tape  price.  The  price  of  a  stock  or  bond  as  printed  by  the 
ticker  (indicator)  on  a  paper  tape. 

Tare.  The  deduction  from  the  gross  weights  of  goods  of 
the  weight  of  the  receptacle,  such  as  box,  cask   or  sack. 

Tariff.  A  schedule  or  list  of  prices  or  rates.  For  instance, 
the  tariff  of  a  hotel  is  the  schedule  or  list  of  prices  at  which  it 
provides  accommodations.  Again,  the  tariff  of  a  railroad  is 
the  schedule  or  list  of  rates  at  which  it  carries  freight  and 
passengers;  likewise,  the  tariff  of  a  telegraph  company  is  the 
schedule  or  list  of  rates  at  which  it  transmits  messages. 

Also,  the  tariff'  is  the  schedule  or  list  of  merchandise  and 
other  articles  with  the  rates  of  duty  to  be  paid  on  them  to  the 
government  when  imported  (and  in  some  instances  when  ex- 
ported). 

Tax.  A  contribution  exacted  compulsorily  from  persons, 
property  or  business  for  the  support  of  the  government. 

Tax  bond.  A  kind  of  bond  issued  by  a  state  and  receivable 
by  it  in  payment  of  taxes. 

Tax-free.     Not  subject  to  taxation. 

Tax  on  a  national  bank.     See  National  bank  tax. 

Technical  conditions  or  a  technical  market.  Technical  con- 
ditions exist  in  a  stock  when  the  price  is  raised  by  manipula- 
tion— by  force  of  buying  orders  given  and  executed  for  the 
purpose ;  or  such  conditions  exist  when  the  price  is  lowered 
by  manipulation — by  force  of  selling  orders  given  and  execut- 
ed for  the  purpose.  Also,  technical  conditions  exist  in  a  stock 
when  the  price  rises  in  consequence  of  enforced  covering  of 
short  contracts  (enforced  buying  by  speculators  who  had  sold 


SMITH'S  FINANCIAL  DICTIONARY.  511 

stock  which  ihc}  did  not  possess)  or  such  conditions  exist 
when  the  price  falls  in  consequence  of  enforced  selling  of  long 
stock  (stock  which  had  been  purchased  with  the  intention  of 
selling  at  an  advanced  figure.) 

A^  technical  market  exists  when  prices  as  a  whole  are  raised 
or  lowered,  as  the  case  may  be,  by  manipulation  ;  also  a  tech- 
nical market  exists  when  an  oversold  condition  compels  cover- 
ing of  short  contracts  with  a  consequent  rise  in  prices  or  when 
an  overbought  condition  compels  liquidation  or  sale  of  long 
stocks  with  a  consequent  fall  in  prices. 

Telegraph  frank.  It  confers  the  privilege  of  sending  and 
receiving  messages  by  telegraph  free  of  charge ;  when  this 
privilege  is  accorded  the  telegraph  company  supplies  a  book 
of  stamps,  each  stamp  l:)eing  good  for  the  transmission  of  so 
many  words  (twenty  usually). 

Telegraphic  transfer.  An  order  communicated  by  tele- 
graph from  one  place  to  pay  money  at  another  place. 

Telegraph  pass.  Same  as  telegraph  frank ;  it  confers  the 
privilege  of  sending  telegraph  messages  free  of  charge  over 
the  wires  of  the  company  issuing  it. 

Teller.  The  clerk  in  a  bank  who  pays  out  money  or  the 
clerk  who  receives  deposits.  The  paying  teller  is  generally 
called  first  teller  and  the  receiving  teller  is  generalh'  called  sec- 
ond teller.  The  note  teller  in  a  bank  is  sometimes  called  the 
third  teller ;  his  particular  business  is  to  attend  to  the  collec- 
tion of  promissory  notes  and  drafts. 

•  Tel  quel  or  tale  quale  rate.  In  foreign  exchange  dealings 
a  tel  quel  or  tale  quale  rate  is  a  net  rate.  It  includes  com- 
mission, brokerage,  or  in  brief,  every  charge,  so  that  the  rate 
is  the  total  rate  or  price,  to  which  there  can  be  no  addition  of 
any  kind. 

Tender.     An  offer  for ;  a  bid  for. 

In  Great  Britain  tenders  arc  sometimes  invited  for  new  is- 
sues of  stock,  chiefly  first  class  securities,  or  Treasury  bills. 
A  minimum  price  is  generally  fixed  and  tenders  at  or  above 
that  price  are  in\'ited. 

Ten  per  cent  up.  On  the  New  York  Stock  Exchange  when 
a  stock  is  bought  or  sold  at  buyer's  or  seller's  option  a  depos- 
it of  10  per  cent  by  each  party  to  the  contract  may  be  re- 
quired to  insure  the  performance  of  the  contract. 


512  SMITH'S  FINANCIAL  DICTIONARY. 

Thin  margin.  Wall  Street  designation  for  a  margin  so 
small  that  it  will  provide  for  only  a  moderate  adverse  move- 
ment in  the  stock  which  has  been  bought  or  sold. 

Third  of  exchange.  For  information  see  First,  second  and 
third  of  exchange. 

Third  teller.  This  is  a  name  sometimes  applied  to  the  note 
teller  in  a  bank ;  his  particular  business  is  to  attend  to  the  col- 
lection of  promissory  notes  and  drafts. 

Thirty.  A  bill  of  exchange  payable  in  30  days  is  often 
called  a  thirty ;  plural,  thirties. 

Three.  On  the  New  York  Stock  Exchange  stocks  sold  "at 
3"'  are  delivered  by  the  seller  to  the  buyer  on  the  third  day 
after  the  transaction,  without  an  option  for  an  earlier  delivery. 

Three  and  a  shilling.  A  member  of  the  New  York  Stock 
Exchange  is  permitted  to  do  business  for  another  member  at 
a  commission  of  1-32  per  cent  for  buying  and  the  same  for 
selling — at  three  and  a  shilling,  or  in  other  words,  at  $3.12  1-2 
per  100  shares  of  stock  of  the  par  value  of  $100  each  or  10 
bonds  of  the  par  value  of  $1,000  each.  The  charge  to  a  person 
not  a  member  is  1-8  per  cent  or  $12.50. 

Through  the  clearing  house.  This  term  is  applied  to  the  act 
of  a  bank  in  presenting  at  the  clearing  house  its  claims 
(checks,  drafts,  etc.)  against  other  banks— the  claims  are  put 
through    or   sent   through   the   clearing   house   for   collection. 

AVhen  a  check  reads  that  it  is  payable  through  the  clearing 
house  it  means  that  the  check  is  not  to  be  presented  directly 
to  the  bank  upon  which  it  is  drawn  and  the  amount  of  it  col- 
lected in  cash,  but  that  it  is  to  be  deposited  in  another  bank 
which  will  send  it  through  the  clearing  house  for  collection. 
This  form  of  check  was  devised  in  1893  when  there  was  such  a 
scarcity  of  actual  currency  (money)  that  it  commanded  a 
premium.  The  banks  could  not  meet  the  demands  upon  them 
for  currency  and  loan  certificates  were  employed  by  them 
instead  of  currency  in  settling  balances  at  the  clearing  house. 
By  requiring  checks  to  be  sent  through  the  clearing  house  the 
payment  of  them  in  actual  money  was  avoided. 

The  scheme  worked  so  well  that  it  was  continued  after  the 
dearth  of  currency  terminated,  with  the  object,  which  it 
accomplished,  of  reducing  cash   payments  at  the  banks  to  a 


SMlTJrs  FINANCIAL  DICTIONARY.  5U 

inininuini.  The  banks  did  not  rigidly  adhere  to  the  rule  that 
checks  must  be  sent  through  the  clearing  house,  but  they 
promoted  the  ])ractise  by  having  "through  the  clearing  house" 
printed  on  the  blank  checks  which  they  supplied  to  customers 
and  by  requesting  customers  who  used  specially  designed 
and  printed  checks  of  their  own  to  do  likewise. 

Through  the  Treasury,  This  term  is  applied  to  transfers  of 
funds  by  a  bank  in  one  city  to  a  bank  in  another  city  through 
the  United  States  Treasury. 

If  a  bank  in  New  York  desires  to  send  $500,000  to  a  bank 
in  Chicago  it  will  deposit  the  money  in  the  Sub-Treasury  in 
New  York  and  will  receive  a  check  payable  (always  in  the 
same  kind  of  money  or  the  kind  of  money  for  which  the 
money  deposited  is  exchangeable)  at  the  Sub-Treasury  in 
Chicago.    The  check  is  sent  by  mail  to  the  Chicago  bank. 

If,  however,  a  telegraphic  transfer  is  desired  the  Sub-Treas- 
ury will  telegraph  (through  the  Treasury  at  Washington)  to 
the  Sub-Treasury  in  Chicago  to  make  immediate  payment. 
A  memorandum  order  for  the  money  is  then  forwarded  by 
mail  by  the  Sub-Treasury  in  New  York  to  the  Sub-Treasury 
in  Chicago  for  use  as  a  record  of  the  transaction. 

Thrown  out  of  loans.  A  Wall  Street  term  ;  securities  which 
are  not  accepted  by  lenders  of  money  as  collateral  are  said  to 
have  been  thrown  out  of  loans.  Usually  when  securities  are 
rejected  as  collateral  it  is  because  of  their  unmarketable  char- 
acter or  because  of  uncertainty  as  to  their  value. 

Ticker.  The  popular  name  for  the  indicator,  the  machine 
operated  by  electricity  which  prints  the  quotations  of  stocks, 
grain    or  cotton,  etc.,  on  a  paper  tape. 

When  the  price  alone  follows  the  letters  standing  for 
the  name  of  a  stock  it  is  understood  that  the  amount  sold 
was  100  shares  (or  in  the  case  of  bonds,  10  bonds).  Thus,  RG. 
75  means  that  100  shares  of  Reading  were  sold  at  75.  When 
more  or  less  than  100  shares  (or  in  the  case  of  bonds,  more  or 
less  than  10  bonds)  are  sold  the  number  of  shares  (or  bonds) 
precedes  the  price,  thus:  RG.  200.75.10.75.  An  offer  alone, 
without  a  bid.  is  preceded  by  an  O  and  a  dot,  thus:  RG.  O. 
75.  A  sale  and  an  offer  is  recorded  (printed)  thus  :  RG.  75.  O. 
75.  A  bid  alone,  without  an  offer,  is  followed  by  the  letter  B, 
thus :  RG.  75.  B.    A  bid  and  an  offer  are  separated  by  @.  thus : 


514  SMITH'S  FINANCIAL  DICTIONARY. 

75@i-2  meaning  that  75  was  bid  and  the  stock  was  offered  at 
75  1-2.  (On  some  tickers  three  dots  .  .  .  are  used  in  place  of 
@).  When  the  sale  is  not  recorded  (printed)  in  its  proper 
place  the  price  is  preceded  by  the  abbreviation  SLD., 
thus :  RG.  SLD.  75.  When  the  amount  sold  and  the  price  are 
so  nearly  alike  that  they  may  be  taken  for  two  sales  the 
amount  of  the  sale  is  followed  by  the  letter  S  and  a  dot,  thus: 
RG.  73.  S.  75,  meaning  73  shares  at  75 ;  or  SIL.  60.  S.  61.  mean- 
ing 60,000  ounces  at  61. 

When  an  error  has  been  made  by  the  reporter  or  in  print- 
ing the  last  letter  or  figure  is  repeated  several  times,  indicat- 
ing that  the  quotation  is  to  be  thrown  out,  thus :  RG.  7S-|  ^  ^  ^. 
Three-day  contracts  (contracts  maturing  in  three  days)  are 
printed  thus :  RG.  200.75.3.  A  transaction  buyer  4,  10,  20,  30 
or  60  is  recorded  (printed)  thus  :  RG.  75.  B4  (or  10,  etc.),  mean- 
ing that  the  stock  sold  at  75,  receivable  by  the  buyer  in  4 
days  (or  10  days,  etc.).  A  transaction  seller  4  (or  10,  etc.) 
when  the  stock  is  deliverable  b}'  the  seller  in  4  days  (or  10 
days,  etc.)  is  recorded  (printed)  in  the  same  manner,  with 
the  letter  S  substituted  for  the  letter  B. 

When  *  is  printed  it  denotes  that  the  quotation  it  follows 
is  correct. 

Tickerosis.  A  slang  term  for  the  mania  of  a  speculator  to 
hang  over  the  ticker,  the  instrument  operated  by  electricity 
which  prints  upon  a  paper  tape  the  quotations  for  stocks,  grain, 
cotton    or  other  speculative  commodities. 

Ticket.  In  transactions  on  an  exchange  brokers  use  de- 
li^-er  and  receive  tickets.  A  deliver  ticket  and  a  receive  ticket 
are  sent  by  the  seller  to  the  buyer.  The  buyer  keeps  the  re- 
ceive ticket  and  stamping  or  writing  an  acknowledgment  on 
the  deliver  ticket  returns  it.  The  operation  is  called  compari- 
son and  it  is  confirmatory  of  the  transaction  between  the  two 
brokers. 

In  trade  the  term  ticket  means  brand,  that  is,  a  brand  of 
goods   or  a  particular  product. 

For  the  meaning  of  the  term  ticket  on  the  London  Stock 
Exchange  see  Name  day. 

Ticket  day.     Same  as  name  day ;  see  Name  day. 

Tickler.  A  name  given  to  a  book  kept  in  a  bank  which 
shows  the  debts  owing  to  the  bank  and  the  days  of  payment. 


SMITH'S  FINANCIAL  DICTIONARY.  515 

This  book  derives  its  name  from  the  fact  that  it  serves  as  a 
reminder  as  to  when  paper  falls  due. 

Tierce.  A  cask  of  lard  containing  340  pounds.  Quotations 
for  lard  are  so  much  per  100  pounds.  To  ascertain  the  value  of 
a  tierce  a  quotation  must  be  multiplied  by  3  2-5  or  decimally 

by  34- 

Time  (New  York  Stock  Exchange).  A  designation  for  2.15 
p.  m.,  when  the  time  has  expired  for  the  delivery  of  securities 
in  settlement  of  contracts  entered  into  on  the  New  York  Stock 
Exchange  which  matured  on  the  current  day.  For  additional 
information  see  Hammond's  time. 

Time  bargain.  London  Stock  Exchange  term  for  a  bargain 
(contract)  due  for  the  new  account,  as  opposed  to  a  bargain  for 
cash  or  for  current  account. 

Time  bill.  A  bill  of  exchange  (draft)  or  promissory  note 
payable  at  a  specified  future  date. 

Time  draft.     A  draft  payable  at  some  specified  future  time. 

Time  limit.  No  contract  on  buyer's  or  seller's  option  which 
extends  beyond  60  days  is  permitted  on  the  New  York  Stock 
Exchange. 

Time  loan.  Wall  Street  designation  for  money  borrowed 
for  a  specified  period,  usually  not  less  than  30  days  nor  more 
than  six  months,  the  repayment  of  which  is  secured  by  the 
deposit  of  collateral  (stocks  and  bonds)  with  the  lender. 

It  is  a  common  practise  for  stock  brokers  to  borrow  money 
on  time  and  to  lend  on  call  so  much  of  what  they  have  bor- 
rowed as  they  have  not  immediate  use  for.  Should  a  broker, 
for  instance,  borrow  $500,000  and  have  use  for  only  $250,000  he 
would  lend  on  call  the  remaining  $250,000.  Should  he  require 
for  his  own  use  more  than  $250,000  he  would  call  in  as  much 
of  the  $250,000  outstanding  as  he  might  need.  Thus,  the 
money  wdiich  he  might  not  have  use  for  would  not  be  idle  but 
would  be  earning  something.  It  might  not  earn  as  much  in 
interest  as  the  broker  had  to  pay  for  it,  but  he  would  be  sure 
of  having  money  when  he  needed  it. 

But  there  is  a  possibility  that  it  might  earn  in  interest  more 
than  the  broker  had  to  pay  in  interest  for  it,  for  in  a  stringency 
in  money  the  rate  for  call  loans  goes  very  high.  Many  times 
it  has  gone  to  3-4  of  i  per  cent  "and  interest,"  which  is  equiva- 
lent to  the  rate  of  279  3-4  per  cent  a  year.    The  3-4  per  cent 


5i6  SMITH'S  FINANCIAL  DICTIONARY. 

is  the  premium  paid  on  the  money  and  the  interest  is  at  the 
legal  rate,  which  in  New  York  state  is  6  per  cent.  The 
premium  is  not  paid  each  day  while  the  loan  stands,  but  is  a 
premium  paid  for  obtaining  the  loan.  But  the  loan  might  be 
called  (the  return  of  the  money  demanded)  the  next  day,  in 
which  case  the  borrower  might  have  to  pay  the  same  premium 
for  a  renewal  of  it  with  the  same  lender. 

There  are  times  in  the  year  when  money  is  less  abundant 
than  at  other  times.  For  instance,  money  becomes  more  or 
less  scarce  as  the  end  of  June  approaches  and  again  as  the  end 
of  December  approaches.  At  these  times  money  is  being  accu- 
mulated for  the  heavy  interest  payments  due  in  the  first  in- 
stance on  July  I  and  in  the  second  instance  on  January  i. 

Again,  as  the  grain  and  cotton  crops  approach  maturity 
money  flows  from  the  money  centres  to  the  regions  where 
these  crops  are  grown  to  pay  for  them.  Until  this  money 
begins  to  find  its  way  back  to  the  money  centres  money  is  not 
in  plentiful  supply  and  has  in  many  years  been  scarce.  It  is 
the  custom  of  brokers  before  this  outflow  to  the  crop  regions 
begins  to  borrow  on  time — for  three  or  four  months — to  make 
sure  of  an  adequate  supply  while  money  is  in  large  use  in  pay- 
ing for  the  crops,  or  to  employ  the  common  expression,  while 
it  is  in  use  in  moving  the  crops.  Money  to  move  the  crops  gen- 
erally begins  to  flow  from  the  East  to  the  West  and  South 
the  latter  part  of  August  and  the  outflow  generally  continues 
until  the  fore  part  of  November.  It  hardly  begins  to  return, 
in  volume,  until  December. 

Also,  when  gold  is  being  exported  money  is  likely  to  be 
difficult  to  obtain.  Accordingly,  if  the  brokers  see  signs  of 
gold  exports  they  prepare  for  stringency  or  emergency  by 
supplying  themselves  with  time  money — by  negotiating  time 
loans. 

By  the  rules  of  the  New  York  Stock  Exchange  a  time  loan 
must  be  paid  before  or  at  2.15  o'clock  on  the  day  on  which  it 
becomes  due  ;  this  also  is  the  rule  of  lenders  generally. 

Also  see  Call  loan. 

Time  money.  A  loan  of  money  for  a  specified  time.  See 
Time  loan. 

Time  note.  A  promissory  note  payable  at  some  specified 
future  time. 


SMITH'S  FINANCIAL  DICTIONARY.  517 

Time  paper.  A  promissory  note,  draft  or  other  instrument 
pa\al)lc  at  a  specified  future  time. 

Tinkering.  When  new  financial  legislation  is  proposed  the 
opponents  of  the  measure  presented  denominate  it  tinkering 
the  finances ;  likewise,  when  new  tarifif  legislation  is  proposed 
opponents  of  the  measure  presented  denominate  it  tinkering 
the  tarifif.  Tinkering,  as  a  colloquialism,  means  to  mend  or 
patch  in  the  manner  of  a  tinker — that  is,  in  a  makeshift  fashion  ; 
sometimes,  to  botch. 

Tip.  A  Wall  Street  colloquialism ;  same  as  point ;  advance 
information  or  a  suggestion  of  supposed  value. 

Tipster.  A  Wall  Street  colloquial  appellation  for  one  who 
imparts  tips  or  points ;  same  as  pointer. 

Title.  Title  to  property  does  not  pass  from  one  to  another 
unless  there  is  a  mutual  agreement  to  that  effect. 

If  an  agent  has  goods  in  his  possession  the  title  is  still  in  the 
principal,  although  the  agent  may  have  advanced  a  larger  or 
smaller  proportion  of  their  value.  If  he  is  not  an  agent  but 
has  simply  advanced  money  on  the  security  of  the  goods  he 
has  a  lien  upon  them  for  his  advance,  but  he  does  not  own 
them.  In  the  absence  of  an  agreement  an  agent  who  has  made 
an  advance  upon  goods  has  a  lien  upon  them  to  that  extent. 
A  creditor  of  the  owner  may  take  the  goods  and  sell  them  sub- 
ject to  his  lien. 

To  account.  To  account  means  to  render  a  report  or  state- 
ment ;  to  make  an  accounting. 

To  arrive.  Anything  bought  to  arrive  is  bought  with  the 
provision  that  it  shall  arrive  (and  be  delivered)  at  or  within  a 
specified  time. 

To  bearer.  A  check  payable  to  bearer  is  payable  to  who- 
ever may  hold  it.  No  indorsement  on  it  is  necessary.  Instead 
of  making  a  check  read  "Pay  bearer"  it  is  a  common  practise 
to  make  it  read  "Pay  cash"  or  "Pay  currency." 

A  promissory  note  or  any  order  for  money  may  be  made 
payable  to  bearer. 

Token  money.  Any  metal  money  not  as  bullion  worth  its 
face  value.  Formerly  the  term  applied  to  a  metal  tablet  in  the 
form  of  a  coin  issued  by  tradesmen  and  others  as  evidence 
of  an  amount  due,  as  stated  thereon,  by  the  issuer  to  the 
holder. 


3i8  SMITH'S  FINANCIAL  DICTIONARY. 

Tolerance.  Same  as  mint  remedy ;  the  extent  to  which  coins 
may  be  abraded  (reduced  in  weight  by  abrasion)  or  otherwise 
worn  and  still  be  redeemable  at  the  Treasury  at  their  face 
value. 

The  law  says  that  any  gold  coins  of  the  United  States  re- 
duced in  weight  by  natural  abrasion  not  more  than  1-2  of  i 
per  cent  after  a  circulation  of  twenty  years,  as  shown  by  the 
date  of  coinage,  and  at  a  ratable  proportion  for  any  period  less 
than  twenty  years,  shall  be  received  at  their  nominal  value  by 
the  United  States  Treasury. 

The  tolerance  on  silver  and  base  metal  coins  is  unlimited; 
the  Treasury  will  receive  them  at  their  face  value  until  abra- 
sion   or  wear  has  obliterated  the  inscriptions  on  them. 

The  term  tolerance  or  mint  remedy  also  applies  to  the  allow- 
ance for  a  slight  difference  in  the  fineness  of  gold  or  silver 
from  the  government  standard.  In  gold  the  limit  of  difference 
above  or  below  is  one-thousandth ;  in  silver  it  is  three-thou- 
sandths. 

Mutilated  coins,  either  gold,  silver,  nickel  or  bronze,  are 
worth  only  their  bullion  value,  or  in  other  words,  are  worth 
only  the  commercial  value  of  the  metal  of  which  they  are 
composed. 

Ton-mile  cost.  A  railroad  term,  meaning  the  average  cost 
per  mile  of  carrying  each  ton  of  freight. 

Ton  miles.  A  railroad  term  ;  the  whole  number  of  miles  the 
whole  number  of  tons  was  hauled.  The  result  attained  by 
adding  together  the  number  of  miles  each  ton  was  hauled  and 
then  dividing  by  the  number  of  tons  shows  the  average  num- 
ber of  miles  each  ton  was  hauled  (transported).  Ton  mileage 
means  the  same  as  ton  miles. 

Tonnage.  Freight  in  tons.  For  instance,  the  tonnage  of  a 
railroad  or  other  carrying  line  is  the  number  of  tons  it  hauls 
or  transports. 

Also,  tonnage  means  the  carrying  capacity  of  a  vessel. 

To  order.  A  pecuniary  instrument  so  made  out  calls  for 
payment  to  the  holder  to  whom  it  has  been  properly  indorsed ; 
when  goods  are  shipped  to  order  the  consignee  is  subsequently 
to  be  named. 

A  check  made  payable  to  a  person  or  to  a  person  or  order, 
as  to  Richard  Smith    or  to  Richard  Smith    or  order,  must  be 


SMITH'S  FINANCIAL  DICTIONARY.  519 

indorsed  with  the  name  of  that  person  before  it  is  collectable. 
The  name  of  the  person  must  be  written  across  the  back  of  the 
check,  which,  when  the  name  stands  thus  alone,  makes  the 
check  payable  to  bearer,  or  the  check  must  be  formally  as- 
signed to  another  on  its  back  by  the  one  in  whose  favor  it  is 
drawn. 

In  Great  Britain  checks  payable  to  order  are  similar  in  efifect 
to  those  payable  to  bearer  in  the  United  States.  In  Great 
Britain  when  a  I^ank  or  banker  has  paid  in  good  faith  in  the 
ordinary  course  of  business  a  check  drawn  on  it  or  him  it  is 
not  incumbent  on  it  or  him  to  show  that  the  indorsement  of 
the  payee  or  any  subsequent  indorsement  was  made  by  or 
under  the  authority  of  the  person  whose  indorsement  it  pur- 
ports to  be  and  the  bank  or  banker  is  deemed  to  have  paid  the 
bill  in  due  course,  although  such  indorsement  has  been  forged 
or  made  without  authority. 

Tout.  Colloquial  appellation  used  in  England  for  a  person 
who  gets  business  by  means  of  push  and  self-advertisement ; 
usually  applied  to  one  who  gets  business  by  these  means  for 
others  and  is  paid  a  commission  on  the  business  attracted. 

To  whom  it  may  concern.  To  whomsoever  is  interested, 
pecuniarily  or  otherwise. 

TR.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  trust  receipts  (receipts  for  securities  held  in  trust). 

Trackage.  AVhen  one  railroad  obtains,  by  contract,  the 
right  to  run  its  trains  over  the  line  of  a  second  railroad  it  is 
said  to  have  obtained  trackage  or  trackage  rights  on  the 
second  railroad. 

Trade.     Buying  and  selling  for  gain  ;  mercantile  traffic. 

In  its  larger  sense  the  term  trade  means  the  same  as  com- 
merce ;  the  exchange  of  goods  products  or  property  of  any 
kind,  especially  such  exchange  between  states  and  nations. 

Also,  a  trade  is  a  complete  transaction  ;  buying  and  selling  or 
vice  versa. 

Trade  balance.     See  Balance  of  trade. 

Trade  bill.  London  term  for  a  domestic  commercial  bill. 
See  Commercial  paper. 

Trade  dollar.  The  act  of  February  12,  1873,  authorized  the 
coinage  of  a  silver  dollar,  designated  as  a  trade  dollar,  weigh- 
ing 420  grains,  .900  fine,  that  is,  nine-tenths  silver  and  one- 


3J0  SMITH'S  FINANCIAL  DICTIONARY. 

tenth  alloy  (copper).    This  was  7  1-2  grains  heavier  than  the 
standard  silver  dollar. 

Any  ov^ner  of  silver  bullion  was  privileged  to  deposit  it 
in  a  mint  to  be  coined  into  trade  dollars.  These  dollars  were 
intended  for  trade  with  China  and  Japan  in  competition  with 
the  Mexican  silver  dollar  which  was  a  trifle  less  valuable.  The 
same  act  made  all  silver  coins  legal  tender  to  the  amount  of 
$5  and  this  was  construed  to  include  the  trade  dollar.  By 
joint-resolution  of  Congress  on  July  22,  1876,  the  legal  tender 
quality  of  the  trade  dollar  was  abrogated  and  the  Secretary 
of  the  Treasury  was  authorized  to  limit  the  coinage  of  it  to 
such  an  amount  as  he  might  deem  necessary  to  meet  export 
demands.  Coinage  of  the  trade  dollar  was  entirely  discon- 
tinued February  22,  1878,  except  for  proof  pieces. 

The  act  of  March  3,  1887,  provided  that  for  a  period  of  six 
months  thereafter  trade  dollars  not  defaced,  mutilated  or 
stamped  should  be  redeemed  at  their  nominal  (face)  value  in 
standard  silver  dollars  or  subsidiary  coin  and  that  the  dollars 
so  redeemed  should  be  recoined  into  standard  dollars  or  sub- 
sidiary coin.  The  same  act  repealed  all  authority  to  coin  trade 
dollars  and  those  not  redeemed  in  the  specified  time  have 
now  only  a  bullion  value. 

It  was  not  intended  that  the  trade  dollar  should  circvdate  in 
the  United  States  at  all,  but  when  the  price  of  silver  fell  so 
that  420  grains  were  worth  less  than  a  gold  dollar  it  became 
profitable  for  owners  of  silver  to  have  it  coined  into  trade 
dollars  for  circulation  at  home.  Then  Congress  took  away 
the  legal  tender  quality  of  the  trade  dollar. 

Trade-mark.  Any  symbol,  mark,  name  or  other  character- 
istic or  arbitrary  indication  adopted  or  used,  as  by  a  manu- 
facturer or  merchant,  to  designate  the  goods  he  manufactures 
or  sells  and  to  distinguish  them  from  the  goods  of  com- 
petitors. 

The  word  "trade-mark"  can  be  used  without  registering  it 
and  such  use  does  not  prevent  or  invalidate  registration  sub- 
sequently. A  trade-mark  is  not  in  this  respect  like  a  copy- 
right or  a  patent  right.  No  one  has  the  exclusive  right  to 
publish  his  own  works  or  to  manufacture  his  own  inventions 
unless  he  establishes  his  right  under  certain  acts  of  Congress. 

The  exclusive  right  to  a  trade-mark  does  not  depend  upon 


SMITH'S  FINANCIAL  DICTIONARY.  521 

any  legislative  act.  The  courts  will  punish  fraudulent  use  of 
a  trade-mark,  even  if  the  real  owner  has  not  registered  it  or 
even  if  the  person  using  it  fraudulently  has  registered  it. 
Registration  confers  no  right ;  it  serves  merely  as  a  notice  of 
claim  of  ownership.  It  is  proof  of  title  which  will  avail  if 
there  is  not  stronger  proof  to  the  contrary. 

Trade  money.  Money  coined  in  one  country  for  trade  with 
another  country.  The  trade  dollar  of  the  United  States  was 
trade  money;  see  Trade  dollar. 

Trade  paper.  English  term  for  domestic  commercial  paper; 
specifically  for  promissory  notes  given  by  merchants  for  goods 
purchased  or  drafts  drawn  on  merchants  in  collection  of  pay- 
ment for  goods  purchased  by  them. 

Trade  price.  The  price  charged  by  a  wholesaler  of  goods 
to  a  retailer  who  sells  again  at  a  higher  price. 

Trader.  One  who  buys  and  sells.  One  who  makes  a  busi- 
ness of  speculation  in  stocks  or  commodities  is  often  desig- 
nated as  a  trader.  Also,  a  vessel  employed  in  any  particular 
trade  (as  the  East  Indian  trade)  is  called  a  trader. 

Traffic.  As  a  commercial  term  trafific  means  business  or 
trade.  iVs  a  transportation  term  it  means  the  business  of  a 
railroad  or  other  carrying  line.  The  term  also  applies  to  the 
business  of  a  telegraph  or  a  telephone  company. 

Traffic  density.  A  term  used  in  railroad  accounting,  mean- 
ing the  result  obtained  when  the  number  of  passengers  carried 
one  mile  is  divided  by  the  number  of  miles  of  road  operated 
and  the  number  of  tons  of  freight  carried  one  mile  is  divided 
by  the  number  of  miles  of  road  operated. 

Trailer.  A  colloquialism  ;  same  as  tailer ;  a  small  speculator 
who  tries  to  follow  a  large  speculator  or  group  of  speculators 
in  his  speculations. 

Train  miles.  A  railroad  term ;  the  number  of  miles  tra- 
versed by  a  particular  train  :  or.  the  number  of  miles  collec- 
tively, traversed  by  all  trains  of  a  railroad.  The  result  at- 
tained by  adding  together  the  number  of  miles  traversed  by 
all  trains  on  a  railroad  and  dividing  by  the  number  of  trains 
shows  the  average  number  of  miles  traversed  by  each  train. 
Train  mileage  means  the  same  as  train  miles. 

Transaction.     A  sale — a  purchase. 

Transcontinental    or   Pacific    railroads.     Atchison.    Topeka 


522  SMITH'S  FINANCIAL  DICTIONARY. 

&  Santa-  Fe ;  Great  Northern,  Northern  Pacific,  Southern 
Pacific,  and  Union  Pacific. 

Transfer,  The  act  of  placing  a  certificate  of  stock  or  a 
registered  bond  in  the  name  of  a  new  owner. 

The  new  owner  of  a  stock  which  is  in  receipt  of  dividends 
or  of  a  registered  bond  upon  which  interest  is  paid  should 
have  it  transferred  into  his  name  before  the  closing  of  the 
transfer  books  for  a  dividend  or  for  interest  for  the  check  for 
the  dividend  or  interest  will  be  sent  to  the  person  in  whose 
name  the  stock  or  bond   stands. 

Transfer  agent.  An  agent  through  whom  stock  may  be 
transferred  from  the  name  of  one  owner  to  the  name  of  an- 
other. Each  stock  company  has  its  own  transfer  office  or  it 
appoints  as  a  transfer  agent  a  bank,  trust  company,  firm  or 
individual. 

Transfer  day.  A  name  for  the  regular  day  for  registering 
transfers  of  bank  stock  and  government  funds  at  the  Bank  of 
England. 

Transfer  deed.  London  legal  and  stock  exchange  name  for 
a  deed  signed  by  the  buyer  and  seller  by  which  registered 
stocks  or  shares  are  legally  transferred  by  the  latter  to  the 
former. 

Transfer  office.  The  place  where  stock  may  be  transferred 
from  the  name  of  one  owner  to  the  name  of  another.  Each 
stock  company  has  its  own  transfer  office  or  it  appoints  as  a 
transfer  agent  a  bank,  trust  company,  firm  or  individual. 

Transferred  in  blank.  Same  as  assigned  in  blank ;  see  As- 
signed in  blank. 

Transmission  of  securities.     See  Investment  securities. 

Traps.  A  Wall  Street  colloquialism  meaning  worthless 
securities ;  same  as  cats  and  dogs   or  junk. 

Traveler's  check  or  cheque.  A  check  for  a  specified  amount 
issued  by  a  banker  and  pa3^able  by  any  correspondent  of  the 
banker.  The  traveler  purchases  a  number  of  these  checks  for, 
say,  $50  each  and  indorses  each  as  he  presents  it  for  payment. 
These  checks  are  largely  used  in  place  of  letters  of  credit. 

Traveler's  letter  of  credit.  The  name  commonly  used  for  a 
circular  letter  of  credit ;  see  Circular  letter  of  credit. 

Treasurer.  The  officer  of  a  corporation  who  receives,  cares 
for  and  disburses  revenues. 


SMITH'S  FINANCIAL  DICTIONARY.  523 

Treasurer  of  the  United  States.  The  officer  of  the  Treasury 
Department  who  receives  and  keeps  money  belonging  to  or  in 
the  custody  of  the  government  and  who  makes  disbursements 
on  warrants    or  drafts. 

Treasury  bill.  English ;  practically  a  government  promis- 
sory note,  payable  in  3,  6,  9  or  12  months. 

When  the  treasury  is  in  need  of  money  for  current  expenses 
it  sells  its  bills  (paper)  at  a  discount  the  same  as  would  a 
merchant  in  need  of  funds.  Tenders  (bids)  are  invited  for 
the  bills  and  the  best  offers  are  accepted.  Most  of  the  English 
floating  debt  is  in  the  form  of  treasury  bills.  Treasury  bills 
are  also  issued  by  India  and  some  British  colonies. 

Treasury  note.  A  note  (money)  issued  by  the  United  States 
Treasury  in  payment  for  silver  bullion  purchased  under  the 
so-called  Sherman  act  or  silver-purchase  act  passed  July  14, 
1890. 

An  important  clause  of  this  act  was  the  one  declaring  it  to 
be  the  "established  policy  of  the  United  States  to  maintain 
the  two  metals  (gold  and  silver)  on  a  parity  with  each  other 
upon  the  present  legal  ratio  (15.988  to  i),  or  such  ratio  as  may 
be  provided  by  law."  In  order  to  comply  with  the  law  it  was 
necessary  when  Treasury  notes  were  presented  for  redemption 
to  pay  on  demand  either  gold  or  silver  as  the  holder  of  the 
notes  might  prefer.  A  refusal  to  do  so  would  have  made  the 
notes  silver  notes. 

The  notes  are  in  denominations  of  $1,  $2,  $5,  $10,  $20,  $50, 
$100,  $1,000  and  are  redeemable  in  coin  at  the  Treasury  and  at 
Sub-Treasuries ;  are  exchangeable  for  all  kinds  of  money  ex- 
cept gold  certificates  and  are  unlimited  legal  tender  except  as 
otherwise  contracted. 

The  amount  of  silver  bought  with  Treasury  notes  during 
the  three  years  before  the  repeal  of  the  purchasing  clause  of 
the  act  on  November  i,  1893,  was  168,674,682  fine  ounces  at  a 
cost  of  $155,931,002  (an  average  of  $0.92.44  per  ounce),  which 
represents  the  total  of  the  note  issue.  The  bullion  purchased 
was  held  as  security  for  the  notes.  Up  to  August,  1893.  the 
notes  presented  for  redemption  were  reissued  whether  they 
were  paid  in  gold  or  silver.  Since  that  date  all  notes  redeemed 
in  silver  have  been  canceled  and  the  bullion  so  released  as 
security  has  been  coined  into  silver  dollars  or  subsidiary  coins. 


524  SMITH'S  FINANCIAL  DICTIONARY. 

Under  the  act  of  March  14,  1900,  Treasury  notes  redeemed  in 
gold  are  reissued  only  in  exchange  for  gold  deposited.  Of  the 
total  issue  only  a  small  part  now  remains  in  existence. 

The  name  Treasury  notes  was  also  applied  to  two  issues  of 
legal  tender  notes  emitted  by  the  United  States  government 
early  in  the  Civil  War.  One  series  bore  simple  interest,  some- 
times 5  per  cent  and  sometimes  6  per  cent,  and  the  notes  had 
a  definite  period  of  payment.  The  5  per  cent  notes  had  interest 
coupons  attached.  The  other  series  consisted  of  compound- 
interest  notes.  These  were  payable  in  three  years  from  date, 
with  interest  at  6  per  cent  compounded  semi-annually  and  pay- 
able at  maturity.  On  the  back  was  printed  a  statement  show- 
ing the  value  at  the  end  of  each  six  months.  Neither  of  these 
issues  was  a  success  as  a  circulating  medium,  the  accruing  m- 
terest  naturally  causing  them  to  be  hoarded. 

Trial  of  the  pyx.  The  test  of  the  fineness  and  weight  of 
coins  reserved  from  each  new  minting  for  the  purpose.  The 
receptacle  for  the  coins  so  reserved  or  selected  is  called  the 

pyx. 

Triangular  operation  in  exchange.  An  operation  in  which 
three  places  are  involved.  For  additional  information  see 
Arbitration  of  exchange. 

Triangular  operation  in  gold.  An  operation  in  which  three 
places  (or  three  countries)  are  involved.  As  an  example,  an 
order  may  be  sent  from  Paris  to  New  York  for  the  shipment 
of  gold  to  Paris.  If  London  is  indebted  to  New  York  New 
York  may  order  the  amount  of  gold  sent  from  London  to 
Paris  instead  of  sending  it  from  New  York.  Thus,  a  large  part 
of  the  transportation  charges,  insurance  and  interest  while  in 
transit  is  saved. 

London  often  meets  obligations  in  New  York  by  ordering 
the  forwarding  of  gold  from  Australia  where  London  has  a 
credit.  On  arrival  in  San  Francisco  the  gold  is  deposited  in 
the  mint  there  which  issues  for  it  a  receipt  or  check  payable 
in  gold  at  the  Sub-Treasury  in  New  York.  Thus,  the  trans- 
portation of  the  gold  across  the  continent  is  avoided. 

For  additional  information  see  Gold  exports  and  imports. 

Trip  pass.  A  ticket  entitling  the  holder  to  a  free  ride  be- 
tween the  points  named  in  it  on  a  railroad  (or  a  steamboat  or 
other  conveyance). 


SMITH'S  FINANCIAL  DICTIONARY.  5^3 

True  discount.  If  interest  is  deducted  at  the  time  a  loan  is 
obtained  it  is  called  true  discount  if  the  amount  received  plus 
the  interest  equals  the  amount  to  be  paid  at  the  maturity  of 
the  oblig^ation. 

True  exchange.  True  exchange  requires  at  least  three  par- 
ties. For  instance,  A  in  New  York  owes  £1,000  to  B  in  Lon- 
don, while  C  in  London  owes  £1,000  to  A  in  New  York.  A, 
therefore,  draws  on  C  in  favor  of  B — in  other  words,  A  sends 
to  B  an  order  on  C  for  the  £1,000. 

As  an  illustration  of  a  more  extended  operation,  A  in  New 
York  owes  £1,000  to  B  in  London.  C  in  Liverpool  owes 
£1,000  to  D  in  Chicago.  D  draws  on  C  and  sells  the  draft  (bill 
of  exchange)  to  A  who  forwards  it  to  B  who  collects  the 
amount  of  it  from  C  (or  what  amounts  to  the  same  thing, 
sells  the  draft  to  a  banker  in  London  who  makes  collection). 

Trunk  lines.  The  railroads  designated  as  the  trunk  lines 
are  the  Baltimore  &  Ohio,  Delaware,  Lackawanna  &  West- 
ern, Erie,  Grand  Trunk,  Lehigh  Valley,  New  York  Central 
&  Hudson  River,  New  York,  Ontario  &  Western,  Pennsyl- 
vania, West  Shore. 

Trust.  The  term  trust  means  credit ;  that  is,  confidence 
that  payment,  especially  voluntary  payment,  will  be  made  at 
a  future  time  for  goods  or  other  property  purchased. 

The  word  trust  also  signifies  custodianship  and  care  of  prop- 
erty. 

The  term  trust  is  commonly  applied  to  a  combination  of 
separate  concerns  or  interests  by  an  actual  consolidation  when 
the  purpose  is  to  control  a  particular  industry  or  a  business. 

For  example,  by  a  consolidation  or  amalgamation  of  steel 
producing  companies  the  ''Steel  Trust,"  so  called,  was  created ; 
likewise,  by  a  combination  of  sugar  refining  companies  the 
"Sugar  Trust,"  so  called,  was  created. 

Probably  the  most  remarkable  economic  and  industrial  de- 
velopment of  the  closing  years  of  the  nineteenth  century  and 
the  opening  of  the  twentieth  has  been  the  rise  and  growth  of 
what  have  come  to  be  popularly  known  as  trusts.  As  applied 
to  a  great  combination  of  capital  brought  together  for  the  pur- 
pose of  controlling  or  dominating  an  industr}^  the  term  found 
its  origin  in  the  manner  in  which  the  original  combinations 


526  SMITH'S  FINANCIAL  DICTIONARY. 

were  formed.  Rival  producers  of,  for  example,  oil  entered  into 
an  agreement  to  work  harmoniously  together,  eliminate  dis- 
astrous competition,  and  take  advantage  of  the  economies  pos- 
sible from  centralized  management.  In  order  to  make  the 
agreement  binding  and  avoid  any  possibility  of  its  being 
broken  the  plan  was  devised  of  turning  the  stock  of  the  various 
concerns  involved  over  to  trustees,  who  in  turn  issued  to  the 
original  stockholders  their  receipts  or  certificates.  The  man- 
agement of  the  properties  then  devolved  upon  the  trustees 
and  harmony  and  centralization  of  authority  were  assured. 
The  properties  being  thus  held  in  trust  it  was  not  long  before 
the  aggregation  became  known  as  a  "trust."  Although  this 
particular  form  of  combination  was  soon  found  to  be  unsatis- 
factory and  impracticable  and  eventually  was  superseded  by 
the  more  simple  and  direct  method  of  outright  purchase  of  the 
combining  interests  by  huge  corporations  organized  for  the 
purpose  the  name  "trust"  is  still  applied  to  all  such  combina- 
tions. 

Trusts  have  given  rise  to  the  most  violent  controversies, 
economic,  legal  and  political.  In  the  view  of  those  who  ap- 
prove and  believe  in  trusts  they  are  but  a  natural  evolution  de- 
manded by  economic  laws  and  beneficial  to  the  body  politic. 
Their  existence  and  growth  is  explained  as  merely  another  step 
in  the  process  by  which  individual  effort  has  been  replaced  by 
combined  effort  in  all  branches  of  human  activity.  The  time 
was  when  primitive  man  individually  worked  out  his  own 
existence.  He  raised  his  own  food  or  obtained  it  by  hunting, 
he  built  his  own  hut,  made  his  own  clothes,  and  hewed  his  own 
dugout  which  he  propelled  by  his  own  strength.  Now,  his 
labor  is  specialized  and  by  the  fruits  of  it  and  the  co-oper- 
ation of  his  fellow-men  he  obtains  his  food  and  his  clothing 
from  the  far  corners  of  the  earth,  he  lives  in  a  house  built  by 
many  hands,  and  speeds  across  the  Atlantic  in  five  days  in  a 
steamship  which  required  the  united  labor  of  thousands  to 
assemble  and  build  and  hundreds  to  operate.  All  this  has  been 
made  possible  by  the  relinquishment  of  individual  independ- 
ence and  the  growth  of  mutual  confidence  and  interdepend- 
ence among  men. 

Just  as  machinery  on  a  vaster  and  vaster  scale  has  displaced 


SMITH'S  FINANCIAL  DICTIONARY.  527 


manual  labor  and  made  possible  the  wonderful  ])hysical  de- 
velopment of  the  earth  to-day,  so,  the  advocates  of  trusts  be- 
lieve, has  cooperation  in  its  political,  industrial  and  commer- 
cial forms  been  the  economic  machinery  by  which  civilization 
has  been  advanced.  Plrst  came  individual  enterprise.  Then, 
undertakings  became  larger  and  copartnerships  involving  two 
or  three  or  perhaps  half  a  dozen  individuals  were  resorted  to. 
Later,  as  the  fields  of  enterprise  still  widened  and  the  burdens 
of  expense  and  management  continued  to  grow,  corporations 
sprang  into  being,  combining  the  resources  and  energies  of 
hundreds.  And  now,  finally,  great  corporations  have  com- 
bined their  strength  in  still  huger  proportions  in  what  are 
known  as  trusts,  carrying  on  the  commercial  and  industrial 
activities  of  the  world  on  a  scale  hitherto  undreamed  of. 

These  successive  steps  in  development  are  explained  as  not 
only  a  perfectly  natural,  but  a  necessary  growth,  if  the  best 
economic  results  are  to  be  obtained.  By  concentration  of  in- 
terests better  organization  is  obtained  and  the  utilization  of 
the  best  brains  and  broadest  experience  is  made  possible. 
Some  of  the  other  advantages,  briefly  summarized,  are :  Econo- 
my in  production,  resulting  from  the  purchase  of  raw  materials 
on  a  large  scale,  the  use  of  the  best  machinery  and  processes, 
specialization  of  plant,  and  the  utilization  of  by-products; 
economy  in  distribution,  resulting  from  direct  control  of  de- 
liveries from  the  nearest  point  of  manufacture  and  the  benefit 
derived  in  rates  from  large  shipments ;  economy  in  sale,  re- 
sulting from  the  elimination  of  competitive  expenses  for  ad- 
vertising, agents,  offices,  etc. ;  economy  in  handling  and  stor- 
age, resulting  from  the  adjustment  of  supply  to  demand  by 
means  of  general  oversight  of  the  whole  field,  thus  avoiding 
overproduction ;  enlargement  of  the  market,  resulting  from 
cheapened  production  and  lower  prices,  thus  making  possible 
larger  profits  from  smaller  margins ;  finally,  better  business 
conditions  in  general,  resulting  from  stability  of  prices  and 
the  avoidance  of  rate-cutting  and  ruinous  competition. 

On  the  other, hand,  opponents  of  the  trusts  see  in  them  an 
immixed  evil.  From  this  point  of  view  trusts  stifle  competi- 
tion by  improper  methods,  tyrannize  over  their  employes  and 
over  the  public,  arbitrarily  raise  prices  and  curtail  production, 


528  SMITH'S  FINANCIAL  DICTIONARY. 

corrupt  legislators,  foster  speculation  through  overcapitaliza- 
tion, and  exercise  generally  a  power  thought  by  many  to  be 
fraught  with  possible  danger  to  the  public  good.  In  addition 
it  is  urged  that  they  crush  individual  effort  and  shut  off  the 
avenues  of  independent  enterprise  and  advancement. 

Trusts  have  been  fought  fiercely  since  their  first  inception, 
in  the  courts,  in  the  legislatures,  and  in  the  public  prints.  In 
their  original  forms,  whether  as  alliances,  as  agreements  or 
as  trusteeships,  they  were  all  declared  illegal  in  this  country 
by  the  courts.  At  the  present  time  none  exists  here  except  in 
the  form  of  full-fledged  corporations  owning  either  in  full  the 
stocks  of  the  constituent  companies  or  a  controlling  interest  in 
each.  In  this  form  they  have  been  able  to  withstand  the  at- 
tacks made  on  them  and  the  opposition  to  them  has  very  gen- 
erally resolved  itself  into  efforts  to  devise  methods  for  govern- 
mental supervision  and  oversight  of  their  operations.  In  Eng- 
land and  Germany,  however,  where  the  trust  movement  has 
been  equally  as  marked  as  in  this  country,  alliances  and  con- 
tracts are  still  a  frequent  form,  having  been  protected  by  the 
courts.  In  other  cases  absolute  fusion  of  competing  busi- 
nesses has  been  effected  as  in  this  country. 

The  Standard  Oil  Company  is  generally  considered  the  par- 
ent of  all  trusts.  It  was  organized  in  the  trustee  form  in  1882. 
It  was  followed  in  this  country  by  many  others,  notably  the 
Sugar  Trust  and  the  Whiskey  Trust.  These  trusteeships  hav- 
ing been  declared  illegal  by  the  courts  reorganization  into  the 
corporation  form  was  resorted  to.  Then  came  for  several 
years  a  perfect  avalanche  of  consolidations,  culminating  in  the 
organization  of  the  United  States  Steel  Corporation  in  1901 
with  a  total  capitalization  of  more  than  $1,500,000,000.  Merely 
to  catalogue  the  list  of  such  consolidations  would  occupy  pages 
of  this  book. 

In  England  the  pioneer  trusts  were  the  Salt  Union  and  the 
United  Alkali  Company,  followed  in  1896  by  J-  &  P-  Coats, 
Limited,  and  scores  of  combinations  in  nearly  every  branch 
connected  with  the  textile  industries,  also  in  iron,  steel,  ship- 
building, armor  and  gunwork,  coal,  borax,  cement,  fireclay,  oil. 
dynamite,  tobacco  and  many  other  commodities. 

In   Germany  perhaps  the   best   known   combination   is   the 


SMITH'S  FINANCIAL  DICTIONARY.  529 

Rhenish  WestphaHan  Coal  Syndicate,  which  controls  94  per 
cent  of  the  West  German  mines,  exclusive  of  those  owned  by 
the  government.  Every  branch  of  the  iron  and  steel  industries 
is  under  control  of  a  syndicate  and  similar  organizations  hold 
sway  in  sugar,  salt,  paper,  alcohol,  plush,  dyes,  cotton  and 
other  industries. 

The  trust  idea  assumed  international  importance  with  the 
formation  of  the  British  American  Tobacco  Company.  Limit- 
ed, a  union  of  English  and  American  tobacco  trusts,  and  of  the 
International  Mercantile  Marine  Company  (commonly  called 
the  Atlantic  Ship  Trust),  a  union  of  some  of  the  largest  Eng- 
lish and  American  shipping  interests. 

The  name  trust  is  sometimes  applied  to  a  combination  of 
separate  concerns  or  interests  by  an  understanding  or  a  com- 
pact, as  a  pool,  but  not  by  an  actual  consolidation.  To  such  a 
combination  the  term  combination  or  combine  properly  applies. 

The  term  ring  also  is  sometimes  mistakenly  used  in  place  of 
the  term  combination  or  combine ;  specificially  the  term  ring 
applies  to  a  clique  or  coterie  of  individuals  and  not  to  a  com- 
bination of  concerns  or  interests. 

Trust  company.  The  banking  law  of  New  York  defines  a 
trust  company  as  a  "corporation  formed  for  the  purpose  of  tak- 
ing, accepting  and  executing  such  trusts  as  may  be  lawfully 
committed  to  it,  and  acting  as  trustee  in  the  cases  prescribed 
by  law,  and  receiving  deposits  of  moneys  and  other  personal 
property  and  issuing  its  obligations  therefor,  and  of  loaning 
money  on  real  and  personal  securities." 

A  trust  company  is  not  permitted  to  issue  bills  to  circulate 
as  money.  It  cannot  lend  money  at  more  than  the  legal  rate 
on  time  and  is  not  obliged  to  keep  a  lawful  money  reserve. 
In  New  York  state  the  law  requires  that  the  capital  of  the 
company  shall  be  invested  in  bonds  and  mortgages  on  unen- 
cumbered real  property  (real  estate)  in  the  state  worth  at  least 
double  the  amount  loaned  thereon  or  of  any  county  ox  incor- 
porated city  of  the  state  duly  authorized  by  law  to  lie  issued. 

The  powers  and  privileges  granted  to  a  trust  company  are 
much  greater  than  those  granted  to  a  bank,  except  that  a  trust 
company  is  not  permitted  to  issue  circulating  notes.  The 
principal  business  and  profit  of  most  trust  companies    is  not, 


530  SMITH'S  FINANCIAL  DICTIONARY. 

despite  the  name,  in  acting  as  trustees,  but  instead  is  in  bank- 
ing and  financing. 

In  Great  Britain  a  trust  company  is  one  whose  main  business 
is  investing  and  dealing  in  stocks  and  bonds  of  other  com- 
panies. 

Trustee.  A  person  who  holds  property  in  trust  for  another 
or  for  creditors. 

Trustee  process.  The  name  in  Massachusetts  for  garnish- 
ment, which  is  the  attachment  for  debt  of  money  or  property 
while  in  the  hands  of  a  third  party. 

Trustee  stock.  A  stock  of  the  highest  class  in  which  trus- 
tees are  authorized  by  law  to  invest. 

Trust  officer.  The  trust  officer  of  a  trust  company  is  the 
officer  who  has  immediate  charge  of  matters  in  which  the  com- 
pany acts  as  trustee. 

T.  T.  Telegraphic  transfer ;  refers  to  the  transfer  of  money 
by  telegraph. 

Turn.  A  Wall  Street  term  for  a  complete  transaction.  The 
sale  of  a  stock  already  purchased  constitutes  a  turn,  as  does 
the  purchase  of  a  stock  already  sold  short. 

Also  see  Jobber's  turn,  a  London  Stock  Exchange  term. 

Turned  down.  A  trade  term ;  when  a  bid  (ofifer)  for  goods 
is  said  to  ha^'e  been  turned  down  it  is  meant  that  it  was  re- 
jected. 

Turn  of  the  market.  Wall  Street  term  for  the  point  at 
which  the  stock  market  changes  its  course. 

On  the  London  Stock  Exchange  the  jobber  (who  is  prac- 
tically a  wholesaler)  will  buy  at  one  price  or  will  sell  at  an- 
other. The  price  midway  between  that  at  which  he  will  buy 
and  that  at  which  he  will  sell — and  he  will  do  either — is  called 
the  middle  price ;  the  jobber  expects  to  undo  or  cover  his  bar- 
gain by.  a  fresh  bargain  with  another  jobber  at  the  middle 
price  ;  the  turn  of  the  market  is  the  difference  between  the 
middle  price  and  the  price  at  which  the  jobber  bought  or  sold. 

Turn  over.  The  total  value  of  the  purchases,  sales  or  other 
transactions  of  a  business  concern  in  any  particular  period. 
For  instance,  the  year's  turn  over  of  a  concern  is  the  total  busi- 
ness of  the  concern  for  the  year. 

Twisting  the   shorts.     A   Wall   Street   colloquialism   which 


SMITH'S  FINANCIAL  DICTIONARY.  531 

means  the  act  of  advancing  prices  on  the  shorts  (bears)  by 
manipulation. 

Two-dollar  broker,  A  member  of  the  New  York  Stock  Ex- 
change who  executes  orders  for  other  members  for  $2  per  hun- 
dred shares  and  whose  participation  in  transactions  ends  with 
the  simple  act  of  buying  or  selling. 

Two-name  paper.  Same  as  double-name  paper ;  paper  that 
is  indorsed.     The  term  double-name  paper  is  commonly  used. 

Two  Sundays  in  one  week.  Railroads  in  making  weekly  re- 
ports of  earnings  count  the  first  seven  days  as  the  first  week, 
the  second  seven  days  as  the  second  week,  the  third  seven 
days  as  the  third  week  and  the  remaining  days  of  the  month 
as  the  fourth  week.  In  a  month  of  30  days  the  fourth  week 
consists  of  nine  days  and  in  a  month  of  31  days  it  consists  of 
ten  days.     Thus,  the  fourth  week  may  contain  two  Sundays. 

For  additional  information  see  Railroad  earnings. 

TX.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  tax. 


U 


U.  K.  These  letters  signify  the  United  Kingdom  of  Great 
Britain  and  Ireland. 

UN.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  unified,  as  unified  bonds. 

Unassented  stock  or  bonds.  Stock  or  bonds  which  the 
owners  refuse  to  deposit  under  an  agreement  by  which  their 
status  will  be  changed.  For  additional  information  see  Re- 
adjustment. 

Unauthorized  clerk.  One  who,  although  admitted  to  the 
London  Stock  Exchange,  is  an  attendant  only  on  the  member 
of  the  exchange  by  whom  he  is  employed ;  his  presence  is  for 
the  purpose  of  checking  (making  and  comparing  memoranda 
of)  bargains  (contracts).  An  authorized  clerk  is  authorized 
by  the  committee  for  general  purposes  of  the  exchange  to 
transact  business  on  the  exchange  for  his  employer. 


S3^  SMJTH^S  FINANCIAL  DICTIONARY. 

Uncovered  notes.  Money  in  the  form  of  notes  that  are  not 
backed  by  gold  or  silver  or  other  security. 

Uncurrent  securities.  Those  not  frequently  dealt  in  and 
especially  those  not  dealt  in  on  an  exchange. 

Under.  On  the  London  Stock  Exchange  under  a  figure  or 
fraction  (sixteenth)  means  1-32  under.  Under  9-16  means 
17-32. 

Underlying  bond.  A  bond  issued  under  a  mortgage  an- 
terior and  prior  in  claim  to  another  mortgage;  see  Underlying 
mortgage. 

Underlying  mortgage,  A  mortgage  anterior  and  prior  in 
claim  to  another  mortgage,  as,  for  instance,  when  speaking  of 
a  second  mortgage  the  first  mortgage  is  the  underlying  mort- 
gage. 

Under  the  rule.  On  the  New  York  Stock  Exchange  when  a 
member  of  the  exchange  fails  to  receive  or  deliver  stock,  ac- 
cordingly as  he  has  bought  or  sold,  the  stock  in  question  is 
bought  or  sold,  as  the  case  may  be,  by  the  chairman  of  the  ex- 
change for  the  account  of  the  delinquent  member,  who  is 
charged  with  any  difference  in  price. 

Uncompleted  transactions  of  failed  members  are  closed  un- 
der the  rule.  Disputes  frequently  result  in  sales  or  purchases 
under  the  rule,  the  final  settlement  of  the  matter  being  de- 
termined by  the  proper  committee  of  the  exchange. 

Undertone.  In  its  application  to  the  stock  market  the  term 
means  underlying  or  inherent  strength  or  weakness,  as  the 
case  may  be. 

Underwriter.  One  who  insures ;  a  member  of  an  underwrit- 
ing syndicate.     For  additional  information  see  Syndicate. 

Underwriting.  Insuring,  as  insuring  or  guaranteeing  that 
new  issues  of  stocks  or  bonds  shall  be  subscribed  for.  For 
additional  information  see  Syndicate. 

Underwriting  syndicate.     See  Syndicate. 

Undoing  a  bargain.  London  Stock  Exchange  term  ;  a  job- 
ber who  has  bought  from  or  sold  to  a  broker  undoes  or  cov- 
ers the  bargain  by  a  fresh  purchase  or  sale,  generally  with 
another  jobber  who  has  dealt  with  another  broker. 

Unfavorable  (foreign)  exchange  conditions.  Sec  Favorable 
and  unfavorable   (foreign)   exchange  conditions. 


SMITH'S  FINANCIAL  DICTIONARY.  533 

Unfunded  debt.     Floating-  debt ;  see  Floating  debt. 

Unified  bonds.  Another  name  for  consolidated  bonds  or 
consols ;  an  issue  of  bonds  created  to  unify  or  consc^lidate  or 
refund  (take  up  and  replace)  two  or  more  previous  issues. 

United  States  note.  A  particular  form  of  paper  money  is- 
sued by  the  United  States  and  based  simply  on  the  credit  of 
the  country  (not  issued  against  gold  or  silver  on  deposit)  ; 
often  called  greenback  (because  the  back  is  printed  in  green) 
and  also  legal  tender  or  legal  tender  note. 

United  States  notes  were  authorized  by  various  acts  of 
Congress  passed  at  the  time  of  the  Civil  War  and  were  vir- 
tually a  forced  loan.  Some  of  the  earlier  issues  were  con- 
vertible into  bonds,  but  this  provision  was  abrogated  on  Jul}- 
I,  1863.  The  highest  amount  at  any  time  outstanding  was 
$449,338,902  on  January  3,  1864.  The  original  intention  was 
to  redeem  the  notes  and  cancel  them  and  by  December 
31,  1867,  the  amount  outstanding  had  been  reduced  to  $356,- 
000.000.  but  Congress  on  February  4,  1868,  passed  a  law, 
without  the  President's  approval,  suspending  further  retire- 
ment. On  March  18,  1869,  Congress  solemnly  pledged  the 
faith  of  the  United  States  to  the  payment  of  these  notes  in 
coin  or  its  equivalent  and  to  make  provision  at  the  earliest 
practical  moment  for  their  redemption.  During  the  panic  of 
1873  the  issue  was  increased  to  $382,979,815,  but  under  au- 
thority of  the  resumption  act.  January  14,  1875,  retirement  of 
the  notes  was  again  undertaken  and  by  May  31.  1878,  the 
amount  outstanding  had  been  reduced  to  $346,681,016,  where 
it  has  remained  ever  since,  as  on  that  date  Congress  passed  an 
act  forbidding  further  cancellation  and  directing  the  reissue 
of  such  as  might  be  redeemed. 

The  resumption  act  went  into  efifect  January  i,  1879.  O^^ 
December  17,  1878,  for  the  first  time  since  1861,  the  notes 
reached  parity  with  gold,  where  they  have  remained  ever 
since.  Their  lowest  status  had  been  reached  in  1864,  when 
they  were  worth  less  than  fifty  cents  on  the  dollar. 

The  resumption  act  authorized  the  Secretary  of  the  Treas- 
ury to  sell  bonds  to  secure  coin  for  redemption  purposes  and 
also  to  make  use  of  any  other  available  Treasury  coin.  As  a 
result  the  Treasury  on  January  T.  1879,  held  over  $114,000,000 


524  SMITH'S  FINANCIAL  DICTIONARY. 

of  available  gold.  From  that  time  it  was  the  established 
policy  of  the  government  to  keep  on  hand  a  reserve  of  $ioo,- 
000,000  in  gold  for  redemption  purposes  and  by  the  act  of 
March  14,  1900,  that  reserve  was  increased  to  $150,000,000. 
The  word  redemption,  as  used  in  this  connection,  is,  however,  a 
misnomer  for  the  reason  that  while  the  government  is  com- 
pelled to  pay  gold  on  demand  for  all  United  States  notes  pre- 
sented it  is  not  allowed  to  cancel  the  notes  so  redeemed  but 
must  reissue  them  in  the  ordinary  course  of  business.  Thus, 
they  get  into  circulation  and  may  be  and  often  are  again  pre- 
sented with  a  demand  for  gold.  This  process  has  come  to  be 
known  as  the  endless  chain  and  by  its  operation  the  govern- 
ment has  been  forced  to  supply  and  pay  out  gold  to  an 
amount  far  in  excess  of  the  total  amount  of  the  notes.  At  the 
same  time  the  debt  represented  by  the  notes  has  not  been  re- 
duced in  the  least,  while  the  notes  themselves  are  still  avail- 
able for  the  purpose  of  extracting  more  gold  from  the  Treas- 
ury. So  active  was  the  working  of  the  endless  chain  in  1894, 
1895  and  1896  that  at  one  time  the  gold  reserve  was  reduced 
to  $42,000,000.  Four  separate  bond  issues,  amounting  in  all 
to  $265,000,000,  were  found  necessary  in  order  to  preserve  the 
redemption  fund  and  maintain  the  credit  of  the  notes. 

United  States  notes  are  issued  in  denominations  of  $1,  $2, 
$5,  $10,  $20,  $50,  $100,  $500,  $1,000.  They  are  exchangeable 
for  all  kinds  of  money  except  gold  certificates,  but  including 
gold  coin,  and  are  a  full  legal  tender  for  the  payment  of  debts 
except  as  otherwise  expressly  stipulated  in  the  contract. 

Unit  of  value.  The  unit  of  value  in  the  United  States  is 
the  gold  dollar  of  25.8  grains,  nine-tenths  fine ;  that  is  nipe- 
tenths  gold  and  one-tenth  alloy ;  worth  100  cents. 

In  the  first  mint  law  of  the  United  States  the  gold  eagle  was 
declared  to  be  ''of  the  value  of  ten  dollars  or  units." 

For  additional  information  see  Moneys  of  the  world. 

Unliquidated  damages.     Unascertained  damages. 

Unlisted  stocks.  This  is  the  common  designation  for  stocks 
which,  in  official  terms,  have  been  "admitted  to  quotation  in 
the  unlisted  department"  of  the  New  York  Stock  Exchange. 
Admitted  to  quotation  means  admitted  to  dealings.  For  de- 
tails as  to  unlisted  stocks  see  Admitted  to  dealings  at  the  New 
York  Stock  Exchange. 


SMITH'S  FINANCIAL  DICTIONARY.  535 

The  term  unlisted  does  not  apply  to  a  stock  that  is  not  dealt 
in  on  the  New  York  Stock  Exchange  at  all.  Such  a  stock  is 
an  outside  stock. 

Unloading.  In  Wall  Street  the  term  unloading  means  dis- 
posing of  stocks. 

Unsecured.    Not  protected  against  loss. 

Unsecured  creditor.  One  whose  claim  is  not  secured  (pay- 
ment not  insured)  by  either  a  pledge  of  property  or  a  lien. 

Upset  price.  The  lowest  price  that  will  be  accepted,  a 
term  frequently  used  at  auction  sales  or  in  offers  otherwise  of 
property  in  competition. 

UR.  As  printed  on  the  tape  by  the  stock  ticker  these  let- 
ters mean  under  the  rule ;  see  Under  the  rule. 

Usance.  A  period  of  time,  variable  as  between  different 
countries,  which,  by  commercial  usage,  is  allowed  for  pay- 
ment of  foreign  bills  of  exchange,  exclusive  of  days  of  grace. 
On  bills  drawn  in  China  and  India  on  European  centres  com- 
mercial usage  has  established  a  usance  of  four  months. 
Double-usance  and  half-usance  are  recognized. 

Usury.  A  premium  paid  or  stipulated  to  be  paid  for  the 
use  of  money  borrowed  beyond  the  rate  of  interest  established 
by  law ;  illegal  profit  from  the  lending  of  money. 

Utter.  To  issue,  as  to  utter  (issue)  a  check,  bill  of  ex- 
change (draft)  or  promissory  note. 

The  word  utter,  however,  is  generally  used  in  connection 
with  the  issuance  of  a  forged  instrument  (as  a  forged  check, 
bill  of  exchange  or  draft,  promissory  note,  etc.)  or  with  the 
issuance  of  counterfeit  money. 

Utterer.     One  who  utters :  see  Utter. 


336  SMITH'S  FINANCIAL  DICTIONARY. 


V 


Valuation.     Estimated   worth   or  value ;   appraisement. 

Value.     The  rate  of  worth  set  upon  a  thing. 

Value  bill  (of  exchange).  A  draft  (bill  of  exchange)  drawn 
against  a  consignment  of  property.  For  instance,  if  A  in  New 
York  ships  goods  to  B  in  London  and  draws  on  B  for  the  value 
of  the  goods,  attaching  the  bill  of  lading,  insurance  policy, 
etc..  to  the  draft  (bill  of  exchange),  the  bill  is  a  value  bill. 

Again,  if  a  banker  in  New  York  sells  securities  to  a  banker 
in  London  and  draws  on  the  banker  in  London  for  the  value  of 
the  securities,  attaching  the  securities  to  the  draft  (bill  of  ex- 
change), the  bill  is  a  value  bill. 

See  Non-value  bill  (of  exchange). 

Value  of  silver.     See  Silver  bullion. 

Value  received.  A  term  used  in  a  promissory  note  or  bill 
of  exchange  to  indicate  that  the  note  has  been  made  or  the  bill 
accepted  for  a  consideration  and  not  for  accommodation. 

Vanderbilt  railroads.  Railroads  controlled  by  Vanderbilt 
interests :  Chicago  &  Northwestern,  Cleveland,  Cincinnati, 
Chicago  &  St.  Louis  (Big  Four),  Lake  Shore  &  Michigan 
Southern,  Michigan  Central,  New  York  Central  &  Hudson 
River,  New  York,  Chicago  &  St.  Louis  (Nickel  Plate),  and 
West  Shore. 

Vendee.     The  person  to  whom  a  sale  is  made. 

Vendor.     The  person  who  sells. 

Vendor's  shares.  English ;  shares  issued  to  a  vendor  by  a 
company  in  payment  or  in  part  payment  for  property  acquired 
from  the  vendor  (seller). 

Via.  A  term  sometimes  applied  to  a  bill  of  foreign  ex- 
change. When  drawn  in  duplicate  or  triplicate  each  bill  is 
called  a  via ;  but  if  only  one  bill  is  drawn  it  is  called  sola. 

Vice-president,  One  who  acts  in  place  of  the  president,  as 
in  the  absence  of  the  president ;  see  President. 

Vise,  An  official  indorsement  on  a  passport  or  other  docu- 
ment   certifying  that  it  is  correct. 

Visible  supply.     Trade  term  for  stocks  of  grain   in   public 


SMITH'S  FINANCIAL  DICTIONARY.  537 

elevators  in  large  cities  and  afloat  on  lakes,  rivers  and  canals. 

Voting  trust.  This  is  created  by  placing  the  stock  of  a  com- 
pany, either  all  or  a  majority,  in  a  trust,  usually  for  a  specified 
period,  for  voting  purposes.  Thus,  the  control  of  the  company 
is  locked  up  in  the  hands  of  trustees.  Receipts  for  the  stock 
are  issued  and  these  may  be  dealt  in  and  receive  dividends 
the  same  as  the  stock  itself,  but  they  have  no  voting  power. 

Voting  trust  certificate.  When  the  stock  of  a  company  is 
lodged  in  a  voting  trust  so  that  the  voting  power  of  the  stock 
is  confided  to  the  trustees  of  the  voting  trust  (commonly  desig- 
nated voting  trustees}  certificates  or  receipts  for  it,  called 
voting  trust  certificates,  are  issued  in  place  of  and  represent 
ownership  of  the  stock.  The  certificates  are  dealt  in  and 
transferred  the  same  as  the  stock  and  when  the  voting  trust 
terminates  or  is  dissolved  the  certificates  are  exchanged  for 
the  stock  itself. 

If  dividends  are  declared  on  the  stock  while  the  voting  trust 
is  in  force  they  are  paid  to  the  holders  of  the  voting  trust  cer- 
tificates. The  certificates,  in  brief,  are  in  all  respects  the 
equivalent  of  the  stock,  with  the  exception  that  they  do  not 
possess  voting  power. 

Voucher.     A  receipt. 


W 


W.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  west   or  western. 

Warehouse  receipt.  A  receipt  for  goods  placed  in  a  ware- 
house. It  is  assignable  and  the  transfer  of  it  completes  the 
delivery  of  the  property  represented  by  it. 

Washing.  A  Wall  Street  colloquialism  used  to  describe  the 
operation  of  simultaneously  buying  and  selling  the  same  stock 
for  the  purpose  of  making  quotations  and  generally  for  the 
purpose  of  inducing  speculation  in  the  stock  by  imparting  ap- 


538  SMITH'S  FINANCIAL  DICTIONARY. 

parent  activity  to  it.  The  transaction  is  fictitious  and  so  is 
the  price. 

Also  see  Manipulation. 

Watch  my  number.  -Each  member  of  the  New  York  Stock 
Exchange  has  a  number.  When  it  is  desired  to  call  a  broker 
from  the  floor  of  the  exchange  his  number  is  made  by  means 
of  an  electrical  device  to  appear  on  an  annunciator  on  the 
wall  of  the  board  room.  If  a  broker  has  occasion  to  leave  the 
room  he  requests  some  fellow-broker  to  "watch  my  number" 
in  order  that  he  may  be  apprised  on  his  return  if  he  has  been 
called  for. 

Watered  stock.  A  colloquialism  used  when  the  capital 
stock  of  a  company  is  increased  in  amount  without  a  corres- 
ponding increase  in  assets.  When  a  stock  dividend  is  de- 
clared the  original  stock  is  watered  to  that  extent  unless  the 
new  stock  represents  added  property   or  value  in  some  form. 

Weather-crop  report.  A  report  issued  weekly  (on  Tues- 
day) in  the  crop  seasons  by  the  weather  bureau  of  the  Agricul- 
tural Department  in  Washington  and  designated  the  "Week- 
ly summary  of  crop  conditions."  It  tells  of  the  weather  in 
the  week  preceding  and  of  its  influence  or  effect,  whether 
favorable  of  unfavorable,  on  the  growing  crops. 

Also  see  Government  crop  report. 

Welching.  A  colloquialism,  meaning  evasion  of  payment  of 
losses  fairly  sustained. 

Westralians.  London  Stock  Exchange  name  for  shares  in 
West  Australian  mining,  land  and  other  companies;  another 
name  is  Kangaroos. 

Wheat  states.  The  states  which  produce  large  crops  of 
wheat,  viz :  Winter  wheat  states  (those  which  produce  large 
crops  of  winter  wheat) — Colorado,  Illinois,  Kansas,  Kentucky, 
Maryland,  Missouri,  Pennsylvania,  Oklahoma,  Oregon,  Ten- 
nessee, Texas.  Spring  wheat  states  (those  which  produce 
large  crops  of  spring  wheat) — Iowa,  Minnesota,  Nebraska, 
North  Dakota,  South  Dakota,  Washington,  Wisconsin. 

When  issued.  A  term  employed  when  dealing  in  a  stock 
not  yet  issued.  When  a  stock  is  sold  w.  i.  it  is  deliverable 
when,  as  and  if  issued.  This  is  a  stock  future  corresponding 
to  a  grain,  cotton  or  coffee  future,  except  that  it  is  indefinite 
as  to  time. 


SMITH'S  FINANCIAL  DICTIONARY.  539 

Whipsawed.  A  Wall  Street  colloquialism,  meaning  that  a 
loss  has  been  sustained  both  ways — first  in  buying  and  then 
in  selHng  short,  or  vice  versa. 

White  list.  The  list  of  the  transactions  in  detail  in  all 
stocks  and  bonds  dealt  in  on  the  New  York  Stock  Exchange 
printed  on  white  paper  daily.  It  is  divided  into  three  parts, 
the  first  containing  sales  from  lo  a.  m.  to  12  noon,  the  second 
containing  sales  from  12  to  2  p.  m.  and  the  third  containing 
sales  from  2  to  3  p.  m. 

White  money.     A  colloquial  name  for  silver  money. 

Wholesale.  Goods  sold  in  quantity  to  retailers  are  goods 
sold  at  wholesale. 

WI.  As  printed  on  the  tape  by  the  stock  ticker  these  letters 
mean  when  issued ;  see  When  issued. 

Wide  margin.  A  Wall  Street  designation  for  an  unusually 
large  margin. 

Wide  opening.  In  an  excited  market  the  opening  prices 
for  stocks  (or  for  commodities)  may  simultaneously  be  wide 
apart  (widely  different)  for  the  same  stocks ;  in  such  a  case  it 
is  described  as  a  wide  opening. 

Wide  prices.  Prices  that  are  not  near  together ;  that  are 
wide  apart.  The  term  applies  when  a  bid  and  an  asked  price 
are  separated  by  i  or  2  per  cent  or  more  instead  of  by  a 
fraction,  as,  for  instance,  100  bid  and  105  asked.  Again,  the 
term  applies  to  fluctuations  in  a  stock  or  a  commodity  in 
which  the  fluctuations  arc  large  (wide).  The  term  also  ap- 
plies when  transactions  occur  simultaneously  in  a  stock  or  a 
commodity   at   prices   wide   apart    (widely   separated). 

Also  see  Wide  opening. 

The  opposite  of  wide  prices  is  close  prices ;  see  Close  prices. 

The  term  wide  price  as  used  on  the  London  Stock  Exchange 
means  that  the  price  at  which  a  jobber  (practically  a  whole- 
saler) will  sell  a  stock  is  widely  different  from  the  price  at 
which  he  will  buy  the  same  stock.    See  Jobber. 

Wildcat  money.  A  name  applied  to  the  depreciated  or 
worthless  money  formerly  issued  by  state  banks  that  became 
insolvent ;  also  called  red  dog  money   and  yellow  dog  money. 

The  term  wildcat  money  applied  originally  to  the  circulat- 
ing notes  (money)  of  banks  in  the  wilds  of  Wisconsin.  These 
banks  were  organized  after  the  enactment  of  the  general  bank- 


5-/0  SMITH'S  FINANCIAL  DICTIONARY. 

ing  law  of  the  state  in  1852  and  they  were  located  in  the  most 
obscure  places,  often  in  huts  in  forests.  The  banks  were 
created  solely  for  the  purpose  of  issuing  circulating  notes  and 
were  established  at  inaccessible  points  in  order  to  prevent  the 
presentation  of  their  notes  for  redemption.  As  their  surround- 
ings were  in  many  instances  the  habitat  of  wildcats  the  banks 
were  called  "wildcat  banks"  and  their  notes  were  called  "wild- 
cat money."  Eventually  the  term  wildcat  was  applied  to  all 
unstable  banks  throughout  the  country  and  to  the  depreciated 
notes  of  such  banks. 

Wildcat  scheme.  A  term  which  signifies  a  visionary  if  not 
a  dishonest  scheme. 

William  Paterson.  William  Paterson  was  the  original  pro- 
jector of  the  Bank  of  England.  He  was  born  in  Scotland  in 
1658  and  died  in  London  in  1719.  The  plan  for  the  Bank  of 
England  was  presented  by  him  to  the  government  in  1691  and 
the  charter  of  the  bunk  was  issued  July  27,  1694.  He  was  a 
director  of  the  bank  for  a  single  year  only. 

He  also  projected  a  plan  for  colonizing  the  Isthmus  of 
Darien  by  the  formation  of  a  company  called  the  "Com- 
pany of  Scotland  for  trading  to  Spain  and  the  Indies."  He 
joined  the  ill-fated  expedition  which  set  out  from  Scotland 
to  Darien  in  1698.  He  returned  home  in  1699  and  in  1700  re- 
moved to  London,  He  was  afterwards  a  member  of  Parlia- 
ment. 

Wind  bill.  In  Scotland  an  accommodation  bill  is  called  a 
wind  bill. 

Winding  up.     English  term  for  the  liquidation  of  a  company. 

Window  dressing.  A  term  used  when  banks  accumulate 
cash  to  make  a  showing  in  the  statements  which  they  are  re- 
quired by  law  to  publish. 

Winter  wheat  states.  The  states  which  produce  large  crops 
of  winter  wheat,  viz:  Colorado,  Illinois,  Kansas,  Kentucky, 
Maryland,  Missouri,  Pennsylvania,  Oklahoma,  Oregon,  Ten- 
nessee. Texas. 

Wiped  out.  A  Wall  Street  colloquialism  employed  when  a 
transaction  is  closed  by  the  exhaustion  of  margin  or  principal. 

Wire.     To  wire  means  to  communicate  by  telegraph. 

Withdrawn.  On  an  exchange  when  a  bid  or  ofifer  is  made 
and  the  one  making  it  says  "Withdrawn"  before  it  is  accepted 


SMITH'S  FINANCIAL  DICTIONARY.  541 

the  bid  or  offer  no  lon.q^cr  liolds  good.  Once  accepted,  how- 
ever, there  can  be  no  withdrawal  except  by  consent  of  both 
parties  to  the  transaction. 

With  exchange.  When  the  words  "with  exchange"  are 
appended  to  a  draft  the  charge  for  the  collection  of  the  draft 
is  to  be  collected  from  the  payer  (the  one  who  is  to  pay)  as 
well  as  the  amount  of  the  draft  itself.  Thus,  if  a  person  in 
New  York  draws  on  a  person  in  Chicago  "with  exchange"  the 
person  in  Chicago  has  to  pay  the  charge  imposed  for  forward- 
ing the  draft  to  Chicago  and  obtaining  payment  of  it  as  well 
as  the  amount  of  the  draft  itself. 

With  exchange  is  different  from  in  exchange ;  see  In  ex- 
change. 

With  interest.  Means  with  interest  added.  When  a  promis- 
sory note  contains  the  words  "with  interest"  without  specify- 
ing the  rate  it  is  understood  that  the  legal  rate  is  to  be  paid. 

Without  recourse.  The  words  "Without  recourse  to"  be- 
fore an  indorsement  on  the  back  of  a  promissory  note  or  bill  of 
exchange  (draft)  absolve  the  person  so  signing  from  any  legal 
process  by  the  holder  in  case  payment  at  maturity  is  not  made. 
In  other  words,  the  indorser  is  a  mere  assignor  of  the  title  to 
the  paper  and  is  relieved  from  responsibility  for  its  payment. 

Witnessed.  When  a  signature  is  witnessed  it  is  authenti- 
cated by  the  signature  of  another  or  others.* 

Worked  for  export.  Trade  term  used  when  grain  has  been 
sold  and  worked  out  of  a  storehouse  into  the  hold  of  a  vessel. 

Working  capital.  Actual  money  required  to  carry  on  a 
business. 

Working  expenses.  Same  as  operating  expenses ;  the  ex- 
penses involved  in  the  operations  of  a  company. 

Working  partner.     English  term  ;  same  as  active  partner. 

World's  shipments.  Designation  for  the  weekly  shipments 
of  grain  from  exporting  to  importing  countries. 

Writing  off.  Debiting  the  profit  and  loss  account  with  a 
loss ;  cancelling  a  debt  as  far  as  the  debtor  is  concerned. 


542  SMITH'S  FINANCIAL  DICTIONARY. 


X 


X.  As  printed  on  the  tape  by  the  stock  ticker  this  letter 
means  ex-coupon  or  ex-dividend  or  ex-interest. 

Also,  X  is  the  same  as  Ex;  without  or  not  including,  as  ex- 
dividend  or  ex-interest.  " 

X-d.  Ex-dividend,  that  is,  w^ithout  the  dividend.  If  a  stock 
upon  which  a  dividend  has  been  declared  is  sold  and  the  sale  is 
not  to  include  the  amount  of  the  dividend  the  stock  is  sold  ex- 
dividend. 

X-i.  Ex-interest;  that  is,  without  interest,  or  in  other 
words,  interest  not  included. 


Y 


Yankee  rails.  London  Stock  Exchange  name  for  the  stocks 
of  American  railroads ;  same  as  American  rails. 

Yankees.  London  Stock  Exchange  name  for  American 
railroad  securities.  * 

Yellow  dog  money.  A  contemptuous  name  applied  to  the 
paper  money  formerly  issued  by  state  banks  which  failed.  For 
additional  information  see  Red  dog  money ;  also  see  Wildcat 
money. 

Yellow  money.     A  colloquial  name  for  gold  money. 

Yield.  This  term  is  often  used  to  signify  the  percentage  of 
return  in  interest  or  dividends.  For  information  see  Income 
basis. 


SMITH'S  FINANCIAL  DICTIONARY.  543 


z 


Zero.     The  lowest  point  in  any  standard  of  comparison. 

Zollverein.  A  union  of  separate  states  for  the  estabhsh- 
ment  of  a  common  tariff  of  duties  on  imports  from  other  coun- 
tries and  for  the  establishment  of  free  trade  among  them- 
selves. 

Zone.  In  agriculture  this  term  means  the  same  as  belt,  as 
the  cotton  or  the  corn  belt. 


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